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Cash Budgeting Collections during month of sale Collections during 1st month after sale Collections during 2nd month after sale General and administrative salaries Lease payments Depreciation charges Miscellaneous Miscellaneous expenses Income tax payments (Sep & Dec) Now New design studio payment (Oct) Cash on hand on July 1 Minimum cash balance Sales adjustment factor 10% 75% 15% $27,000 $9,000 $36,000 $4,050 $67,000 $175,000 $128,000 $95,000 0% August January July $320,000 $112,000 $480,000 $736,000 September S640.000 $272,000 October $320,000 $208,000 November $320,000 $144,000 December $80,000 $80,000 $160,000 May June Sales $160,000 $160,000 Costs of labor and raw materials $80,000 $80,000 a. Preparing a monthly cash budget for the last 6 months of 2021 The Cash Budget May June Collections and purchases worksheet Sales (gross) July August September October November December Collections During month of sale During 1st month after sale During 2nd month after sale Total collections Total Purchases Labor and raw materials Payments for labor and raw materials Cash gain or loss for month Collections Payments for labor and raw materials General and administrative salaries Lease payments esse Miscellaneous expenses Income tax payments Design studio payment Total payments Net cash gain (loss) during month Loan requirement or cash surplus Cash at start of month Cumulative cash Target cash balance Cumulative surplus cash or loans outstanding to maintain the target cash balance b. Preparing monthly estimates of the required financing or excess funds July August September October November December Required financing or excess funds e. Doing a sensitivity analysis that shows the effects of the change in sales and the collection terms Maximum loan required #N/A Change in sales (B14) Maximum loan required % Collections in 2nd month (B5) 30% 45% 60% 0% 15% 75% 90% -100% -75% -50% -25% 0% 25% 50% 75% 100% Cash Budgeting Collections during month of sale Collections during 1st month after sale Collections during 2nd month after sale General and administrative salaries Lease payments Depreciation charges Miscellaneous Miscellaneous expenses Income tax payments (Sep & Dec) Now New design studio payment (Oct) Cash on hand on July 1 Minimum cash balance Sales adjustment factor 10% 75% 15% $27,000 $9,000 $36,000 $4,050 $67,000 $175,000 $128,000 $95,000 0% August January July $320,000 $112,000 $480,000 $736,000 September S640.000 $272,000 October $320,000 $208,000 November $320,000 $144,000 December $80,000 $80,000 $160,000 May June Sales $160,000 $160,000 Costs of labor and raw materials $80,000 $80,000 a. Preparing a monthly cash budget for the last 6 months of 2021 The Cash Budget May June Collections and purchases worksheet Sales (gross) July August September October November December Collections During month of sale During 1st month after sale During 2nd month after sale Total collections Total Purchases Labor and raw materials Payments for labor and raw materials Cash gain or loss for month Collections Payments for labor and raw materials General and administrative salaries Lease payments esse Miscellaneous expenses Income tax payments Design studio payment Total payments Net cash gain (loss) during month Loan requirement or cash surplus Cash at start of month Cumulative cash Target cash balance Cumulative surplus cash or loans outstanding to maintain the target cash balance b. Preparing monthly estimates of the required financing or excess funds July August September October November December Required financing or excess funds e. Doing a sensitivity analysis that shows the effects of the change in sales and the collection terms Maximum loan required #N/A Change in sales (B14) Maximum loan required % Collections in 2nd month (B5) 30% 45% 60% 0% 15% 75% 90% -100% -75% -50% -25% 0% 25% 50% 75% 100%

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