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Capital Industries budgeted monthly sales are $15,000, and they are constant from month to month. 25%...

Capital Industries budgeted monthly sales are $15,000, and they are constant from month to month. 25% of its customers pay in the first month and take the 2% discount, while the remaining 75% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month’s sales are constant at 40% of projected sales for the next month. “Other payments,” which include wages and rent, are 15% of sales for the current month. The tax rate of the company is 25% of sales which is to be submitted to tax department on monthly basis. Construct a cash budget for a typical month and calculate the average cash gain or loss during the month.

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