ABC Corp. Departmental Stores Inc. is currently in troubled waters. Competition from online retailers has resulted in less frequent store visits from customers. A recent survey has revealed that customers on an average are also spending less time on the shopping floor. Accurate budgeting is therefore a key element of business success and survival for ABC Corp. You have just been hired as an intern at ABC Corp. headquarters in Cleveland OH and your first assignment is to help the CFO Ms. Cathy Wilkins prepare a cash budget. At your first meeting with the CFO, you are provided with the following information.

Past Sales

Nov 2021: $750,000

Dec 2021: $675,000

Projected Sales for Six-Months ending June 2021 are as follows:

January February March April May June

$250,000 $300,000 $375,000 $550,000 $400,000 $575,000

Sales Receivables

Cash Sales: 25% of Net Sales; Payment for 45% of Net Sales are received the following month; Receivables for all other sales are collected after 60 days (i.e., two months).

Cost of Goods Sold

Cost of Goods Sold is currently estimated at 65% of Net Sales. ABC Corp. pays 20% in cash upfront, 45% next month and for the remaining, it enjoys a Net 60 credit terms.

Wages and Salaries

Fixed Cost $75,000 and this is applicable for months January through June. The variable wages and salaries (in addition to the fixed cost) are estimated at 25% of difference between the Net Sales for the month and the average sales for January and February. *Hint the formula is within the excel document for the wages section.

Miscellaneous Fixed Overhead Expenses

Store Lease $35,000; Utilities and Water $2,000; Interest on Long-Term Corporate Bonds $15,000.

Taxes

$5,200 for January; $8,000 for June.

Dividends

Estimated quarterly dividends in the tune of $20,000 will be paid to shareholders in January and $35,000 in April.