ACCOUNT RECONCILIATION: A service provided by banks whereby banks reconcile a business's cash accounts and create summary reconciliation reports.SWEEP ACCOUNTS: Accounts where banks automatically invest surplus cash balances in scure overnight accounts. Earnings are usually based on the federal funds traded rate, and the interest eared is credited daily.LoCKBOX: A service whereby banks assign customers a specially numbered P$.$O$.$ box and collect and process payments on a daily basis. This reduces the float time of payments.ZERO BALANCE ACCOUNTS: A senice whereby cash balances of all accounts are consolidated $($or zeroed out$)$ into a single account. Banks invest the surplus funds on behalf of the business.CREDIT CARD TRANSACTION FEE: A lee that credit card companies charge to merchants $[$or processing.Application Exercises$1.$ What are three key methods of minimizing the amount of working capital needed? Give an example of each$\mathrm{.}2.$ The cash sales and credit sales projected for Sarah's Kitchen are as follows:$3\mathrm{.}4\mathrm{.}6\mathrm{.}7.$CashCreditJanuary $$17,00040,000$February $$19,64042,000$March $$16,20048,000$April $$15,38050,000$May$$17,39049,500$If collections of credit sales are $70\%$ the first month and $30\%$ the second month, what would be the cash receipts for March, April, and May?Using the same data as for Exercise $4-2,$ if Sarah's Kitchen has a $1\%$ bad debt allowance and can collect only $29\%$ of accounts receivable in the second month, what would be the cash receipts for March, April, and May?Discuss the zero balance accounts and lockbox services that most banks offer. List three advantages and three disadvantages of each service. Feel free to visit Internet sites for banks and other financlal institutions as you determine your response.Ask your manager at work what credit card processing fees your hospitality operation is charged. Explain how credit card companies determine the transaction fee percentage charged to merchants.Search at least three websites regarding credit card fees and compile the range of transaction fees charged by these companies.You are the manager of the Potomac Inn. You would like to pay all your employees a Christmas bonus totaling $$10,000.$ Your owner, Joseph, agrees with your incentive rewards but wants to make sure the Inn will generate enough cash flow in December to pay the $$10,000$ and still maintain a minimum $$5,000$ cash balance. Based on the following infor$-$