I am so lost right now...I am not understanding how to apply all this info to a cash budget. Please any help will be greatly appreciated.


Kay, Inc. is preparing a cash budget for the month of March. The following information is available.

January February March
Sales $150,000 $180,000 $185,000
Materials purchases $90,000 $100,000 $140,000
Other cash payments $31,000 $24,000 $45,000

All sales are on account with 60% collected during the month of the sale, 35% collected the following month, and the remaining 5% are uncollectible.

All materials purchases are on account with 70% paid during the month of the purchase and the remaining 30% paid the following month.

Kay, Inc. must maintain a minimum cash balance of $20,000 at all times. Financing is available so that the company can borrow needed funds in increments of $1,000 at an interest rate of 8%. Kay expects to have a cash balance of $20,000 on March 1.

Required:
1. Prepare a schedule of cash collections for March.
2. Prepare a schedule of cash payments for March.
3. Prepare a cash budget for March. Be sure to include any borrowing needs.