Problem:
The ABC Corporation's budgeted monthly sales are $4000. In the first month 40% of it's customers pay and take the 3% discount. The remining 60% pay in the month following the sale and don't receive a discount. ABC's bad debts are very small and are excluded from this analysis. Purchases's for next month's sales are constant each month at $2000. Other payments for wages, rent and taxes are constant at $500 per month.
Required:
Question 1: Construct a single month's cash budget with the information given.
Question 2: What is the average cash gain or (loss) during a typical month for the ABC Corp.
Note: Please show the work not just the answer.