6 x Helen Bowers, owner of Helen's Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the form for parts 2018 me 2020: May 2019 $186,000 June 106,000 July 372,000 August 540,000 September 720,000 October 360,000 November 360,000 December 90.000 January 2020 180.000 Estimates regarding payments obtained from the credit department are as follows collected within the month of sale, 100collected the month following the collected second month following the sale, 15%. Payments for Labor and raw materials are made the months after these services were provided. Here are the estimated costs or materials: May 2019 $90,000 June 90,000 July 126,000 August 881.000 September 307,000 October 234.000 November 161,000 December 90,000 General and administrative salaries are approximately $26,000 a month. Lease payments under long-term lases are $9,000 a month. Depreciation charges are 36.000 Miscellaneous expenses are $2,600 a month. Income tax payments of $63,000 are due in September and December A progress payment of $100,000 on a new design shida paid in October. Cash on hand on July 1 will be $132,000, and a minimum cash balance of $90.000 should be maintained throughout the cath budget period a. Prepare a monthly cash budget for the last 6 months of 2019. If no entry required, entero or leave it blank. Al payments and expenses should be entered a positive numbers. Cash losses, negative cash balance, negative cumulative cash and Cumulative loans outstanding. If any should be indicated by a mission Hound your art the nearest dollar, necessary Round your answers to May June July August September October November December January Collections and purchases worksheet Sales (grass) Collections During month of sale During ist month after sale During 2nd month after sale Total collections Purchases Labor and $ raw materials Payments for labor and row materials LA . $ $ 5 VUOD MUMEWORK month Collections Payments for Labor and raw materials General and administrative salaries Lease payments Miscellaneous expenses Income tax payments Design studio payment Total payments Nutcashgan (los) during month Loan requirement or ca uplus Cash at start of met Cumulative ca Target cas balance Cumulative surplus 5 5 0 outstanding to maintain 590,000 target cash balance $ b. Prepare monthly estimates of the required financing or excess funds that is, the amount of money Bowers will need to borrow or will have available to invest. Round your answers to the nearest dollar. Enter loans outstanding with minus sign. Round your answers to the nearest dollar, if necessary July August September October November December $ 5 $ $ $ c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 or 1/31 each day), but all outflows must be paid on the Sth. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? In a situation, where inflows and outflows are not synchronized during the month, to be possible to use a casts budget centered on the end of the month To make a valid estimate of the peak financing requirements, the company d. Bowers sales are seasonal: and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the company's current and be ratios would vary during the year if ait financial requirements were met with short-term bank loant Could changes in these ratios affect the firm's ability to obtain bus credit The months preceding peak sales would show det B current ratio and B debt-to-capital ratio due to additional short term bank loans. In the following months as receipts are collected from sales, the current ratio would B and the debt-to-capital ratio would B. Large changes in these ratios affect the firm's ability to obtain bank credit