1)     Khaled Industries, a defense contractor, is developing a cash budget for October, November, and December. 

Khaled’s sales in August and September were $100,000 and $200,000 respectively. Forecasted Sales for October, November, and December are as below: October – $400,000 November – $300,000 December – $200,000.

30% of the firm’s sales have been for cash, 50% have been collected after 1 month, and the remaining 20% after 2 months. Bad-debt expenses (uncollectible accounts) have been negligible. In December, Khaled will receive a $30,000 dividend from stock in a subsidiary.

Khaled has also gathered the relevant information for the development of a cash disbursement schedule. Purchases will represent 70% of sales – 40% will be paid immediately in cash, 60% is paid the month following the purchase. The firm will also expend cash on rent, wages and salaries every month of $52,000. 

Prepare  Cash Budget for October, November and December.