Atlas Products Inc.

Prepare a cash budget for Atlas Products, Inc for the firstquarter of 2008, based on the following information.
The budgeting section of the corporate finance department of AtlasProducts has received the following sales estimates from themarketing department:
TotalSales               CreditSales
December2007          825,000               770,000
January2008          730,000               690,000
February2008          840,000               780,000
March2008          920,000               855,000
The company has found that on average, about 25 percent of itscredit sales are collected during the month when the sale is made,and the remaining 75 percent of credit sales are collected duringthe month following the sale. As a result, the company uses thesefigures for budgeting.
The company estimates its purchases at 60 percent of next month’ssales, and payments for those purchases are budgeted to lag thepurchases by one month.
Various disbursements have been estimated as follows:
Jan          FEB          MAR
Wages andsalaries          250,000     290,000     290,000
Rent                    27,000          27,000          27,000
Otherexpenses               10,000          12,000          14,000
In addition, a tax payment of $105,000 is due on January 15, and$40,000 in dividends will be declared in January and paid in March.Also, the company has ordered a $75,000 piece of equipment.Delivery is scheduled for early January, and payment will be due inFebruary. The company’s projected cash balance at the beginning ofJanuary is $100,000, and the company desires to maintain a balanceof $100,000 at the end of each month.