and Eunice is preparing her first quarter cash budget for this year. It is important to her because of the variation , in volume and cash available caused by the return of the university students. Eunice has budgeted her revenues cost of sales, and operating expenses based on her forecasts for January, February, and March. From her hospitality management classes, Eunice recalls that her ending cash balance for one month is the beginning cash balance of the next month, and she has compiled the following information and assumptions about her operation Percent of revenue expected to be collected in the month it was generated (current month) Percent of revenue expected to be collected in the month after it was generated based on AR aging Accounts receivable to be collected in January from December AR Percent of cost of sales to be paid in the month they were incurred (current month) Percent of cost of sales to be paid one month after they were incurred (as AP) Amount to be paid in January from AP for cost of sales incurred in December Percent of operating expenses to be paid in the month they were incurred (current month) Percent of operating expenses to be paid one month after they were incurred (from API Amount to be paid in January (from AP) for operating expenses incurred in December Percent of non-operating expenses to be paid in the month they were incurred (current month) Monthly rent expense First of each quarter insurance premium Beginning cash balance on January 1 Ending cash balance for one month is beginning cash balance of the next month Minimum required cash balance (for emergencies) Short-term loan denominations Short-term loan interest rate 80% 20% $30,000 60% 1096 $19.000 70% 30% $21.000 1009 $4.000 $6,000 $5,000 $5,000 $5,000 10% Help Eunice complete ber cash budget and the answer the questions that to Sithabito's Wraps Cash Budget for the First Quarter of This Year GIVEN DATA January S000 February $132.000 $16.200 $36.000 March $96,000 $33,000 $32.000 $28.000 Revenues Cost of Sales Operating Expenses Non Operating Expenset Rent Expense Insurance Premiums $1,000 54.000 $4,000 $6,000 Current Month SOS Second Month 205 $30.000 -105 Schedule of Receipts (AR) AR from December (Received in January Schedule of Payments (AP) Cost of Sales Operating Expenses Non Operating Expenses Cost of Sales from December (Paid in January Operating Expenses from December (Paid in January 60% 70% 100% CASH BUDGET January February March Receipts Food Revenues Current Month Second Month 80% Disbursements Cost of Sales Current Month Second Month Operating Expenses Current Month Second Month Non-Operating Expenses 100% Beginning Cash Balance Cash Receipts Subtotal Cash Disbursements Test Your Skills 449 GIVEN DATA Subtotal January February March Short-Term Loans Ending Cash Balance a. Will Eunice have to borrow any short-term loans to cover cash shortfalls in the first quarter of the year? If so, how much money will she have to borrow, and what do you think may have caused this? b. If Eunice has to borrow a short-term loan to cover cash shortfalls in the first quarter of the year, will she be able to pay it back in a timely manner? If so, when? c. By the end of the quarter, will Eunice have a surplus or deficit of cash? If she has a surplus, what should she do with the extra money? d. Overall, how do you think Eunice is doing at planning her cash receipts and cash disbursements in order to keep enough cash on hand to pay her bills