1.

scheduled to begin in 20Y2 and be completed in 20Y3.

Vice President of Manufacturing: Once the new factory building is finished, we plan to purchase $1.5 million in equipment in late 20Y3. I expect that an additional $200,000 will be needed early in the following year (20Y4) to test and install the equipment before we can begin production. If sales continue to grow, I expect well need to invest another $1,000,000 in equipment in 20Y5.

Chief Operating Officer: We have really been growing lately. I wouldnt be surprised if we need to expand the size of our new factory building in 20Y5 by at least 35%. Fortunately, we expect inflation to have minimal impact on construction costs over the next four years. In addition, I would expect the cost of the expansion to be proportional to the size of the expansion.

Director of Information Systems: We need to upgrade our information systems to wireless network technology. It doesnt make sense to do this until after the new factory building is completed and producing product. During 20Y4, once the factory is up and running, we should equip the whole facility with wireless technology. I think it would cost us $800,000 today to install the technology. However, prices have been dropping by 25% per year, so it should be less expensive at a later date.

Chief Financial Officer: I am excited about our long-term prospects. My only short-term concern is managing our cash flow while we expend the $4,000,000 of construction costs on the portion of the new factory building scheduled to be completed in 20Y2.

Use this interview information to prepare a capital expenditures budget for Omicron Inc. for the years 20Y220Y5. Enter all amounts as positive numbers.

Omicron Inc. Capital Expenditures Budget For the Four Years Ending December 31, 20Y2-20Y5

	20Y2	20Y3	20Y4	20Y5
Building
Equipment
Information systems
Total

2.

Schedule of Cash Collections of Accounts Receivable

Office World Inc. has "cash and carry" customers and credit customers. Office World estimates that 20% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows:

October	$115,000
November	144,000
December	210,000

The Accounts Receivable balance on September 30 was $77,000.

Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar.

Office World Inc. Schedule of Collections from Sales For the Three Months Ending December 31

	October	November	December
Receipts from cash sales:
Cash sales	23000	28800	42000
September sales on account:
Collected in October	fill in the blank 4
October sales on account:
Collected in October	fill in the blank 5
Collected in November		fill in the blank 6
November sales on account:
Collected in November		fill in the blank 7
Collected in December			fill in the blank 8
December sales on account:
Collected in December			fill in the blank 9
Total cash receipts	$fill in the blank 10	$fill in the blank 11	$fill in the blank 12