Question: Stover Mills prepares a monthly cash budget. As a basis for its 2001 cash budget, it has compiled the following information:

1. Monthly sales forecast for 2001 as follows:

   January	$350,000	June	510,000	October	450,000
   February	375,000	July	525,000	November	450,000
   March	425,000	August	475,000	December	425,000
   April	525,000	September	475,000	January	375,000
   May	5 15,000

2. Eighty percent of sales are on credit terms, and 20% are for cash. Sixty percent of total sales are collected in the first month following the month of sale. The remainder are collected in the second month following the month of sale.
3. Materials purchases in each month are equal to 30% of sales forecasted for the next month. The purchases are paid for in the month after purchase.
4. Production is scheduled at the level of forecasted sales for the following month. Labor expenses are equal to 45% of forecasted sales and are payable in the month of production.
5. Selling and administrative expenses of $40,000 per month are paid in the month incurred.
6. Interest expense of $18,500 on long-term debt and bank loans is due on • June 30 and December 31.
7. Overhead expense of $45,000 per month is paid in the following month.
8. Estimated tax payments are:
   April 15 $20,000 September 15 35,800
   June 15 25,000 December 15 25,000
9. No dividends will be paid.
10. Actual sales in the last two months of 2000 were:
    November $400,000 December 400,000
    (xi) Depreciation expense is $5,000 per month.
    1. Prepare a monthly schedule of sales revenues and total cash inflows.
    2. Prepare a monthly schedule of operating, expenses and a monthly schedule of other expenditures.
    3. If the cash balance is $50,000 on Dec. 31, 2000, determine the cash balance each month during 2001 without financing.

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