The bank has asked them to produce a 4 year cash budget broken down by year. Sales of $500,000 are expected in the first year with sales increasing each year thereafter by 22%. Sales in 2009 were $450,000. Purchases are based on expected cost of sales of 45% and a required ending inventory of 10% of the next year's sales. Purchases in 2009 were $200,000 & beginning inventory was $32000. Annual expenses include Advertising Exp $10,000, marketing exp. $6000, depreciation exp. $8000, interest exp. $35000, salaries exp. $150000, wages exp, $65000, supplies exp. $7500, utilities $10000. All expenses except depreciation are pain in the year in which they are incurred and are expected to increase 5% each year. Collections in the year of sale are expected to be 94% with the remaining 6% collected in the next year.Payments in the year of purchase are expected to be 93% with the remaining 7% paid in the next year, Proceeds from the $300000 loan are expected in 2010 & $75000 of facilities will be purchased each year. Proceeds from expected equipment sales each year are expected to amount to $10000. Annual payments of $81171 on the loan also begin in 2010. The beginning cash balance in 2010 was $20000.
Everything has to have assumptions and or formulas no numbers are to be inputted directly per the instructors instructions. He also has given the following ending cash amount 2010 $68311, 2011 $51532, 2012 ($8987) & 2013$2472. I have been working on this for four days now and my ending balances aren't making sense.