The CFO of IPOD Accessories, Inc. has asked for your help in estimating the
Firm’s additional financing needed for next year. The CFO has provided the
Following information to help you with your task:
Sales are forecasted to increase by $450,000.
Total assets will increase by 80 percent of increase in sales.
Current liabilities will increase by 30 percent of increase in sales.
Net income is projected to equal $125,000.
Projected dividend payments will equal $35,000.
Guarantee

. Prepare a cash budget for Rotor Products, Inc. for the second quarter of 2006, based on the following information. The marketing department has provided
You with the following sales estimates, all of which are for cash:

Total Sales
March 2006 (actual) $425,000
April 2006 330,000
May 2006 420,000
June 2006 450,000

The company estimates its purchases at 60 percent of next month’s sales,
And payments for those purchases are budgeted to lag the purchases by
1 month.

Various disbursements have been estimated as follows:
April May June
Wages and salaries $220,000 $190,000 $190,000
Rent 14,000 14,000 14,000
Other expenses $ 5,000 6,000 7,000
In addition, a tax payment of $55,000 is due on April 15. The company’s
Projected cash balance at the beginning of April is $60,000, and the company
Desires to maintain a balance of $50,000 at the end of each month.

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