Cash Budget Appendix Refer To The Information In Problem 633

Cash budget (appendix.) Refer to the information in problem 6-33. Assume the following: Pet Transport (PT) does not make any sales on credit PT sells only to the public; aid accepts cash and credit cards. 90% of its sales are to customers using credit cards, for which PT gets the cash right away less a 3% transaction fee. Purchases of materials are on account PT pays for half the purchases in the period of the purchase, and the other half in the following period. At the end of March, PT owes suppliers $8,500. PT plans to replace a machine in April at a net cash cost of $13,700. Labor, other manufacturing costs and non-manufacturing costs are paid in cash in the month incurred except of course, depreciation, which is not a cash flow. $20,000 of the manufacturing cost and $10,000 of the non-manufacturing cost for April is depreciation.

PT currently has a $2,000 loan at an annual interest rate of 12%. The interest is paid at the end of each month. If PT has more than $10,000 cash at the end of April it will pay back the loan. PT owes $5,000 in ‘come taxes that need to be remitted in April. PT has cash of $5,360 on hand at the end of March. Prepare a cash budget for April for Pet Transport.

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