Cactus Company Is Preparing Its Cash Budget for 2012

Essay

Cactus Company is preparing its cash budget for 2012. The company ended 2011 with a cash balance of $135,000 and needs to keep a minimum cash balance of $130,000 for operations.
During 2012, collections from customers are expected to be $680,000 and payments for the cost of services are estimated to be $430,000. The purchase of new equipment is budgeted for $300,000, and Cactus Company must make debt payments of $75,000. Cactus anticipates selling some excess land it has held for several years for a cash price of $205,000.
Prepare the company's cash budget for 2012. Will the budgeted level of cash available provide the company with the desired minimum cash balance, or will the company need additional financing? If so, how much?