Khaled Industries, a defense contractor, is developing a cash budget for October, November, and December. (i)...

Khaled Industries, a defense contractor, is developing a cash budget for October, November, and December.

(i) Khaled’s sales in August and September were $100,000 and $200,000 respectively. Forecasted Sales for October, November, and December are as below: October - $400,000 November - $300,000 December - $200,000
30% of the firm’s sales have been for cash, 50% have been collected after 1 month, and the remaining 20% after 2 months. Bad-debt expenses (uncollectible accounts) have been negligible. In December, Khaled will receive a $30,000 dividend from stock in a subsidiary.

(ii) Khaled has also gathered the relevant information for the development of a cash disbursement schedule. Purchases will represent 70% of sales - 40% will be paid immediately in cash, 60% is paid the month following the purchase. The firm will also expend cash on rent, wages and salaries every month of $52,000.
Prepare a Cash Budget for October, November and December.

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ekkarill92 answered 1 year ago

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