Answer:
To compute the respective net cash flows and cumulative cash balances for the months indicated on the cash budget, we can start with an initial cash balance and then calculate the net cash flow and cumulative cash balance for each month.
Given the cash budget for six months:
Jan. Feb. Mar. Apr. May June
Sales Receipts: $300 $350 $300 $350 $400 $300
Cash Disbursements: $200 $200 $210 $295 $375 $300
Let's calculate the net cash flows and cumulative cash balances:
Month: January
Net Cash Flow = Sales Receipts - Cash Disbursements
Net Cash Flow = $300 - $200
Net Cash Flow = $100
Cumulative Cash Balance = Initial Cash Balance + Net Cash Flow
Cumulative Cash Balance = $0 + $100
Cumulative Cash Balance = $100
Month: February
Net Cash Flow = Sales Receipts - Cash Disbursements
Net Cash Flow = $350 - $200
Net Cash Flow = $150
Cumulative Cash Balance = Previous Cumulative Cash Balance + Net Cash Flow
Cumulative Cash Balance = $100 + $150
Cumulative Cash Balance = $250
Month: March
Net Cash Flow = Sales Receipts - Cash Disbursements
Net Cash Flow = $300 - $210
Net Cash Flow = $90
Cumulative Cash Balance = Previous Cumulative Cash Balance + Net Cash Flow
Cumulative Cash Balance = $250 + $90
Cumulative Cash Balance = $340
Month: April
Net Cash Flow = Sales Receipts - Cash Disbursements
Net Cash Flow = $350 - $295
Net Cash Flow = $55
Cumulative Cash Balance = Previous Cumulative Cash Balance + Net Cash Flow
Cumulative Cash Balance = $340 + $55
Cumulative Cash Balance = $395
Month: May
Net Cash Flow = Sales Receipts - Cash Disbursements
Net Cash Flow = $400 - $375
Net Cash Flow = $25
Cumulative Cash Balance = Previous Cumulative Cash Balance + Net Cash Flow
Cumulative Cash Balance = $395 + $25
Cumulative Cash Balance = $420
Month: June
Net Cash Flow = Sales Receipts - Cash Disbursements
Net Cash Flow = $300 - $300
Net Cash Flow = $0
Cumulative Cash Balance = Previous Cumulative Cash Balance + Net Cash Flow
Cumulative Cash Balance = $420 + $0
Cumulative Cash Balance = $420
Therefore, the respective net cash flows and cumulative cash balances for the months indicated are:
Jan. Feb. Mar. Apr. May June
Net Cash Flows: $100 $150 $90 $55 $25 $0
Cumulative Cash Balances: $100 $250 $340 $395 $420 $420