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Panther City has two major sources of revenues, property tax and sales tax, which are...

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Finance

Panther City has two major sources of revenues, property tax and sales tax, which are billed according to the schedule at the top of the next page. Traditionally, property tax revenue have been received in cash according to the following schedule:

  • 30 percent one month following the billing date 20 percent in second month
  • 20 percent in third month
  • 9 percent in fourth month
  • 8 percent in fifth month
  • 6 percent in sixth month
  • 7 percent are not collected

The state collects the sales tax revenues and will transfer cash to the city on March 1, 2018, for the sales tax revenues earned in the last quarter of 2017.

Panther City is not planning any capital asset purchases during the next three months. Monthly cash disbursements for general operations are $3,500,000. Beginning cash balance for January 1, 2018, is $600,000. Panther City will borrow to ensure that the ending cash balance each month is at least $200,000.

Use this information to prepare a monthly cash budget for Panther City for January, February, and March of 2018.

2017

July

Aug.

Sept.

Oct.

Nov.

Dec.

Prop. Tax

50,000,000

Sales Tax

50,000

55,000

62,000

60,000

68,000

112,000

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