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  3. 3) the following information pertains to amigo cor

3) The following information pertains to Amigo Corporation: Month Sales Purchases ...

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Accounting

3) The following information pertains to Amigo Corporation:

Month Sales Purchases

July $30,000 $10,000

August 34,000 12,000

September 38,000 14,000

October 42,000 16,000

November 48,000 18,000

December 60,000 20,000

Cash is collected from customers in the following manner:

Month of sale 40%

Month following sale 40%

Two months following sale 10%

Uncollectible Accounts 10%

60% of purchases are paid for in cash in the month of purchase, and the other 40% is paid the following month.

Required: Complete the cash budget (no discounts) for the 4th quarter.

October November December

Beginning Balance: $10,000

Cash Collections from:

August

September

October

November

December

--------------- --------------- -----------------

Total Cash Collections

Total Cash Available

Cash Payments from:

September

October

November

December

-------------- ---------------- -------------------

Total Cash Payments

Ending Cash Balance

Amigo has $50,000 principal loan balance and needs to pay it, but also needs to keep a $10,000 minimum balance. What month is the earliest that Amigo can pay off this loan while keeping the minimum cash balance? ___________________

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