# The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows: Of Sharpe’s sales

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:
Of Sharpe’s sales, 10 percent is for cash, another 60 percent is collected in the month following sale, and 30 percent is collected in the second month following sale. November and December sales for 2010 were \$219,000 and \$174,800, respectively. Sharpe purchases its raw materials two months in advance of its sales equal to 60 percent of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays \$11,000 per month for rent and \$19,200 each month for other expenditures. Tax prepayments of \$21,800 are made each quarter, beginning in March. The company’scashbalance at December 31, 2010, was \$23,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financingif sufficient funds are available. Interest on short-term loans (12 percent) is paid monthly.borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$58,360, these funds would be borrowed at the beginning of April with interest of \$584 (i.e., 12%x1/12×58,360) owed for April and paid at the beginning of May.
a. Prepare a cash budget for Sharpe covering the first seven months of 2011.
b. Sharpe has \$201,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?

January 90,500
February 120,300
March 134,900
April 239,100
May 299,000
June 270,100
July 225,700
August 149,600

Could you provide a spreadsheet to show the work for the calculations with formulas to help me understand up to August, 2011? I have copied for Nov. to January below.
November December January
Sales \$219,200 \$174,800 \$90,500
Collections:
Month of Sale (10%) \$9,050
First Month (60%) \$104,880
Second Month (30%) \$65,760
Total Collections \$179,690
Purchases \$72,180 \$80,940
payments (one month lag) \$72,180
Cash Receipts:
Collections \$179,690
Cash Disbursements:
Purchases \$72,180
Rent \$11,000
Other Expenditures \$19,200
Tax Deposits \$0
Interest on Short-term Borrowing
Total Disbursements \$102,380
Net Monthly Change \$77,310
Beginning Cash Balance \$23,000
Additional Financing Needed (Repayments) 23000 \$0
Ending Cash Balance \$100,310