8 Theta Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual November December $600,000 January 620,000 February March Sales Credit sales Cash sales Forecast Additional Information $730,000 $680,000 April forecast 720,000 740,000 Of the firm's sales, 40 percent are for cash and the remaining 60 percent are on credit. Of credit sales, 30 percent are paid in the month after sale and 70 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 50 percent of sales and is paid in the month of sales. Selling and administrative expense is 8 percent of sales and is also paid in the month of sales. Overhead is $35,000 in cash per month; amortization expense is $12,000 per month. Taxes of $9,900 will be paid in January and dividends of $5,500 will be paid in March. Cash at the beginning of January is $120,000 and the minimum desired cash balance is $115,000. a. Prepare a schedule of monthly cash receipts for January, February and March. Total cash receipts Collections in the month after credit sales Collections two months after credit sales Theta Products Cash Receipts Schedule December November $ Prepare a schedule of monthly cash payments for January, February and March. Theta Products Cash Payments Schedule nuary February March January $ $ February $ March $ April $

Theta Products has elight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mc. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Foliowing are actual and forecasted sales figures: Of the firm's sales, 40 percent are for cash and the remaining 60 percent are on credit. Of credit saios, 30 percent are paid in the month after sale and 70 percent are poid in the second month after the saic. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the curfent month's expected salos. Materials are paid for in the month they are received. Labour expense is 50 percent of sales and is paid in the month of sales. Selling and administrative expense is 8 percent of sales and is also poid in the month of sales. Overhead is $35,000 in cash per month, amortization expense is $12,000 per month. Taxes of $9,900 will be paid in January and dividends of $5,500 will be poid in March, Cash at the beginning of January is $120,000 and the minimum desired cash balance is $115.000 a. Presare a schedule of monthly cash receipts for January, Fobruary and March. b. Prepare a schedule of monthly cash payments for January. February and March