problem

calculate a cash budget from following data for October to Decembers

sale purchases salaries

sept 40000 80000 25000
oct 120000 52500 30000
nov 70000 80000 300000
dec 12000 80000 300000

sale are collected 20% in cash same month and 80% credit of which half is same month half is next.
purchases are 100% credit paid one month later salaries are paid same month.
opening cash is 10000. Minimum balance is 10000
interest is 12% per annul. loans are made at the month.
loans are made and paid in rounded 1000

what is the closing cash balance

Tho' is the problem i am having i know how to do the sale but the purchase salaries i don't know can some on help me on this problem

To calculate the cash budget, you need to consider the cash inflows and cash outflows for each month. Let's break down the calculations for each component:

1. Sales:
- In September, you received $40,000 in sales. Since it is the same month, $8,000 (20% of $40,000) will be collected in cash.
- In October, you made $120,000 in sales. Again, 20% ($24,000) will be collected in cash.
- In November, you made $70,000 in sales. Following the given terms, 20% ($14,000) will be received in cash.
- In December, you made $120,000 in sales. Similarly, 20% ($24,000) will be collected in cash.

2. Purchases:
- In September, you made purchases worth $80,000. However, since purchases are 100% credit, you don't have to allocate any cash for this month.
- In October, you made purchases worth $52,500. As per the terms, this will be paid the following month (November) in cash.
- In November, you made purchases worth $80,000. Again, this would be paid in cash the next month (December).
- In December, you made purchases worth $80,000, which will be paid in cash the following month (January).

3. Salaries:
- Salaries, which are paid in the same month, are as follows:
- In September, you paid $25,000 in salaries.
- In October, you paid $30,000 in salaries.
- In November, you paid $30,000 in salaries.
- In December, you paid $30,000 in salaries.

Now let's calculate the cash budget:

Opening cash balance: $10,000

October:
- Cash inflows: $8,000 (sales)
- Cash outflows: $30,000 (salaries) + $52,500 (purchases)
- Net cash for October: $8,000 - $30,000 - $52,500 = -$74,500

November:
- Cash inflows: $14,000 (sales)
- Cash outflows: $30,000 (salaries) + $80,000 (purchases)
- Net cash for November: $14,000 - $30,000 - $80,000 = -$96,000

December:
- Cash inflows: $24,000 (sales)
- Cash outflows: $30,000 (salaries) + $80,000 (purchases)
- Net cash for December: $24,000 - $30,000 - $80,000 = -$86,000

Closing cash balance:
Opening cash balance + Net cash for October + Net cash for November + Net cash for December
= $10,000 - $74,500 - $96,000 - $86,000
= -$246,500

The closing cash balance is -$246,500.