Problem 4 – Cash Budget Background : Sales for July , August , and September are expected to be $ 200 , 000 , $ 210 , 000 , and $190 , 000 ,…

Background:  Sales for July, August, and September are expected to be $200,000, $210,000, and $190,000, respectively, for Pasta Company.  All sales are on account and are collected 50% in the month of the sale and 45% in the following month.  The remaining 5% is determined to be uncollectible.  Raw materials are purchased one month before being needed, and all purchases and expenses are paid for as incurred.  The cash balance at 8/1/2017 is $8750.  Activities for the quarter are expected to be: 

Problem 4 – Cash BudgetBackground : Sales for July , August , and September are expected to be $ 200 , 000 , $ 210 , 000 , and $190 , 000 , respectively ,for Pasta Company . All sales are on account and are collected 50% in the month of the sale and 45% in the following*month . The remaining 5% is determined to be uncollectible . Raw materials are purchased one month before being*needed , and all purchases and expenses are paid for as incurred . The cash balance at 8 / 1 / 2017 is $8750 . Activities for thequarter are expected to be :JulyAugustSeptemberSales$ 200 , 000$ 210 , 000$ 190 , 000Raw materials used$40, 000$36 , 000$4 4 , 000Salaries$80 , 000$85 , 000$75 , 000Maintenance and repairs$18 , 000$ 18 , 000$ 18 , 000Depreciation$36 , 000$36 , 000$36 , 000Utilities and other$15 , 000$ 15 , 000$15 , 000Dividends paid- O -$10 , 000- O -Payment on bonds$8, 000$8 , 000$8 , 000Directions : Prepare a cash budget and management recommendations for August 2017*

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