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CF Problem 4-24 Cash budget [LO4-2] Graham Potato Company has projected sales of $6,600 in September, $10,500 in October, $16,600 in November, and $12,600 in December. Of the company's sales, 20 percent are paid for by cash and 80 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December Also assume Graham's cash payments for November and December are $14,000 and $6,500, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December Graham Potato Company Cash Receipts Schedule September October November December Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts $ 0 $ b. Prepare a cash budget with borrowing needed or repayments for November and December. (Negative amounts should be indicated by a minus sign. Assume the November beginning loan balance is $0.) Graham Potato Company Cash Budget November December Total cash receipts Total cash payments Net cash flow 0 $ 0 $ 0 $ 0 Beginning cash balance Cumulative cash balance Monthly borrowing (repayment) Ending cash balance Cumulative loan balance $ 0 $ 0

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