A. Prepare a cash budget for Sharpe covering the first seven months of 2014.

B. Sharpe has $200,300 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have sufficient cash to repay the notes?

(Preparation of a cash budget) The Sharpe Corporation's projected sales for the first eight months of 2014 are as follows: Of Sharpe's sales, 10 percent is for cash, another 60 percent is oollected in the month following the sale, and 30 percent is collected in the second month following the sale. November and December sales for 2013 were S220,900 and $174,500, respectively Sharpe purchases its raw materials two months in advance of its sales equal to 60 percent of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays $10,6000 per month for rent and $20,800 each month for other expenditures. Tax prepayments of $22,500 are made each quarter, beginning in March The company's cash balance at December 31, 2013, was $21,600; a minimum balance of $15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12 percent) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional $65,740, these funds would be borrowed at the beginning of April with interest of $657 (i.e., 0.12x 1/12x65,740) owed for April being paid at the beginning of May a. Prepare a cash budget for Sharpe covering the first seven months of 2014 b. Sharpe has $200,300 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have sufficient cash to repay the notes? a. Prepare a cash budget for Sharpe covering the first seven months of 2014 Data Table Complete (month by month) the cash budget below (Round to the nearest dollar.) NOV DEC JAN $300.200 January $91,000 May 220,900 $ Sales 174,500 91,000 February 120,300 June 269,700 Cash Receipts March 134,400 July 225,500 Sales for cash (10 % ) 150,000 $ April 240,000 August $ First month after sales (60% ) Second month after sales (30 % ) $ pone Print Total Cash Recelpts Cash disbursements Raw materials Rent $ Other expenditures T mnt m ? Enter any number in the edit fields and then click Check Answer. Rent $ Other expenditures x prepayments Total Cash Disbursements Net Change in Cash Net change in cash for period |(+) Beginning cash balance $ () Interest on short-term borrowing $ (-) Short-term borrowing repayments ) Ending cash balance b/ borrowing New Financing Needed Financing needed for period $ Ending cash balance 21,600 $ Cumulative borrowing Enter any number in the edit fields and then click Check Answer. parts remainina 7 Clear All EA (Preparation of a cash budget) The Sharpe Corporation's projected sales for the first eight months of 2014 are as follows: Of Sharpe's sales, 10 percent is for cash, another 60 percent is oollected in the month following the sale, and 30 percent is collected in the second month following the sale. November and December sales for 2013 were S220,900 and $174,500, respectively Sharpe purchases its raw materials two months in advance of its sales equal to 60 percent of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays $10,6000 per month for rent and $20,800 each month for other expenditures. Tax prepayments of $22,500 are made each quarter, beginning in March The company's cash balance at December 31, 2013, was $21,600; a minimum balance of $15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12 percent) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional $65,740, these funds would be borrowed at the beginning of April with interest of $657 (i.e., 0.12x 1/12x65,740) owed for April being paid at the beginning of May a. Prepare a cash budget for Sharpe covering the first seven months of 2014 b. Sharpe has $200,300 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have sufficient cash to repay the notes? a. Prepare a cash budget for Sharpe covering the first seven months of 2014 Data Table Complete (month by month) the cash budget below (Round to the nearest dollar.) NOV DEC JAN $300.200 January $91,000 May 220,900 $ Sales 174,500 91,000 February 120,300 June 269,700 Cash Receipts March 134,400 July 225,500 Sales for cash (10 % ) 150,000 $ April 240,000 August $ First month after sales (60% ) Second month after sales (30 % ) $ pone Print Total Cash Recelpts Cash disbursements Raw materials Rent $ Other expenditures T mnt m ? Enter any number in the edit fields and then click Check Answer. Rent $ Other expenditures x prepayments Total Cash Disbursements Net Change in Cash Net change in cash for period |(+) Beginning cash balance $ () Interest on short-term borrowing $ (-) Short-term borrowing repayments ) Ending cash balance b/ borrowing New Financing Needed Financing needed for period $ Ending cash balance 21,600 $ Cumulative borrowing Enter any number in the edit fields and then click Check Answer. parts remainina 7 Clear All EA