Jessy M Inc. wants to produces and sells customized swarovski rings.

Sales forecast for the first four months of 2020 are presented below:

January February March April

Sales in units 180 183 192 219

Cash Receipts Budget

Fact Pattern:

1 The trend is expected to continue until June 2020.

2 Total sales consist of 30% cash, the balance is on account. Collection of accounts receivable follows this pattern:
50% in the month of sale
30% in the month following the month of sale
18% in the second month following the month of sale
2% uncollectible
3 The selling price of each ring is P3,500.
4 Cash receipts are expected to come mainly from cash sales and collection of accounts receivables. However, the company also receives
rental income of P20,000 per month fro the commercial spaces that it lets to a number of tenants within the store premises.

January February March April May June

Sales in units 180 183 192 219 300 543
SP/u 3,500 3,500 3,500 3,500 3,500 3,500
Sales in pesos 630,000 640,500 672,000 766,500 1,050,000 1,900,500

Cash sales 189,000 192,150 201,600 229,950 315,000 570,150

Collection of credit sales
Current month 220,500 224,175 235,200 268,275 367,500 665,175
One month previous 132,300 134,505 141,120 160,965 220,500
Two month previous 79,380 80,703 84,672 96,579
Cash reciepts from sales 409,500 548,625 650,685 720,048 928,137 1,552,404
Rental income received 20,000 20,000 20,000 20,000 20,000 20,000
Total cash receipts 429,500 568,625 670,685 740,048 948,137 1,572,404

Cash Dirsbursements Budget

Fact Pattern:

1 Because of the difficulty of finding suppliers of gold and diamonds, as well as the problem of transporting the same from the suppliers
place to Jessy's store, it set a policy of keeping in stock an inventory level equal to 40% of the next month's budgeted sales.
2 Total purchases consist of 10% cash, the balance is on account. Payment of accounts payable follows this pattern:
90% in the month of sale
10% in the month following the month of sale
3 The anticipated purchases price is expected to remain at P1,250 per unit.
4 Operating expenses amount to P45,000 per month,including depreciation of P10,000. Expenses are paid in the month od incurrence.
5 In January, the company will buy a new display shelf costing P36,000. The terms are 20% downpayment, with the balance payable in
24 equal monthly installments.
6 On February the company paid P5,000 for an ad to be published on June.

January February March April May June

Sales in units 180 183 192 219 300 543
Add: Ending inventory 73 77 88 120 217 509
Goods available for sale 253 260 280 339 517 1,052
Less: Beginning inventory 73 77 88 120 217
Puchases in units 253 187 203 251 397 835
PP/u 1,250 1,250 1,250 1,250 1,250 1,250
Purchases in pesos 316,500 233,250 253,500 314,250 496,500 1,043,250

Cash purchases 31,650 23,325 25,350 31,425 49,650 104,325

Payment of credit purchases
Current month 256,365 188,933 205,335 254,543 402,165 845,033
Previous month 28,485 20,993 22,815 28,283 44,685
Cash payments on purchases 256,365 217,418 226,328 277,358 430,448 889,718
Operating expenses paid 35,000 35,000 35,000 35,000 35,000 35,000
Fixed-asset outlays 7,200 1,200 1,200 1,200 1,200 1,200
Advertisement payment 5,000
Total cash disbursements 298,565 258,618 262,528 313,558 466,648 925,918

Cash Budget

For the month of January, the company expects to have a cash balance of P20,000. For the succeeding months however, the
minimum cash balance is expected to increase by 150% based on the previous months' minimum cash balance.

January February March April May June

Total cash receipts 429,500 568,625 670,685 740,048 948,137 1,572,404
Less: Total cash disbursements 298,565 258,618 262,528 313,558 466,648 925,918
Net cash flow 130,935 310,008 408,158 426,491 481,490 646,487
Add: Cash, beginning - 130,935 440,943 849,100 1,275,591 1,757,080
Cash, Ending 130,935 440,943 849,100 1,275,591 1,757,080 2,403,567
Less: Minimum cash balance 20,000 50,000 125,000 312,500 781,250 1,953,125
Excess cash (Required financing) 110,935 390,943 724,100 963,091 975,830 450,442