Prepare the cash flow budget - prepare the cash flow budget

Question

THE TRAVEL PHOTOGRAPH

ANNUAL BUDGET:

	May	June	July	August
Sales	200	1,000	2,000	2,500
Cost of goods sold
Supplies	40	200	400	500
Gross profit margin	160	800	1,600	2,000

Prepare the cash flow budget considering the following elements:

1- The photograph is always paid 30 days after the sale

2- The photograph has to pay his supplies cash on delivery

3- At the beginning of June the bank account amounts to ($1,000); this means that he is using the line of credit

THE FISHING POND - Seasonal business

The Festival takes place in August; it is in operation only from May to September

	August	September	October	November	December	January	February
Sales	75,000	45,000	20,000	5,000	-
Cost of goods sold
Supplies	15,000	9,000	4,000	1,000	-
Guides	22,500	13,500	6,000	1,500	-
Total Cost of good sold	37,500	22,500	10,000	2,500	-
Gross profit margin	37,500	22,500	10,000	2,500	-
Operational Expenses	8,000	8,000	8,000	8,000	8,000	8,000	8,000
Net profit	29,500	14,500	2,000	(5,500)	(8,000)	(8,000)	(8,000)

Prepare the cash flow budget for September to December considering the following elements:
1- Sales receipts
a- On average, 20% of the sales are received 30 days before the sales as deposits
b- On average, 80% of the sales are received on delivery
2- The pond pays its supplies 30 days later
3- The guides are paid the day of the sales
4- The operational expenses are paid in the same month as the purchase
5- The pond will purchase $5,000 worth of equipement in September
6- The pond will contract a loan of $4,000 in September to pay for the equipment
7- The pond will start reimbursing the loan in September at the amount of $115 per month
8- At the beginning of September the bank account amounts to $40, 000
9- What is going to happen in January and February