60\%s Due Accounts Payable Cashout Budget Beginning Cash Receipts: Collections (1) Available Purchases (2) Variable Costs (3) (3) Variable Costs Fixed Costs (3) Total Disbursed Cash Balance December January \begin{tabular}{|l|l|} \hline (3) Variable Costs & ($670,000$155,000)$3,218,750 saies = \\ & 16=16% \\ & December $$61,00016%=$89,760 \\ & January $612,00016%=$97,920 \\ \hline & (155,000FC43,400 depreciation )/12 mo, =$9,300 per month \\ \hline \end{tabular} - Under the current projections, the cash balance as of January 31,2015 , is $(8,315), which is not sufficient to enable repayment of the $107,000 note. 2. Why do laia's managers prepare a cash budget in addition to the operating budget? 6-39 Cash budgeting. On December 1,2014, the laia Wholesale Co. is attempting to project cash receipts and disbursements through January 31, 2015. On this latter date, a note will be payable in the amount of $107,000. This amount was borrowed in September to carry the company through the seasonal peak in November and December. Selected general ledger balances on December 1 are: Sales terms call for a 3% discount if payment is made within the first 10 days of the month after sale, with the balance due by the end of the month after sale. Experience has shown that 50% of the billings will be collected within the discount period, 30% by the end of the month after purchase, and 15% in the following month. The remaining 5% will be uncollectible. There are no cash sales. The average selling price of the company's products is $170 per unit. Actual and projected sales are: All purchases are payable within 15 days. Approximately 60% of the purchases in a month are paid that month and the rest the following month. The average unit purchase cost is $130. Target ending inventories are 570 units plus 20% of the next month's unit sales. Total budgeted marketing, distribution, and customer-service costs for the year are $670,000. Of this amount, $155,000 are considered fixed (and include depreciation of $43,400 ). The remainder varies with sales. Both fixed and variable marketing, distribution, and customer-service costs are paid as incurred. 1. Prepare a cash budget for December 2014 and January 2015. Supply supporting schedules for collections of receivables; payments for merchandise; and marketing, distribution, and customer-service costs. 2. Why do laia's managers prepare a cash budget in addition to the operating income budget