Archer Electronics Company's actual sales and purchases for April and May are shown here along with forecast sales and purchases for June through September: April (actual) May (actual) June (forecast) July (forecast) August (forecast) September (forecast) Sales $370,000 350.000 325,000 325,000 340,000 380,000 Purchases $ 155,000 145,000 145,000 205,000 225,000 220,000 The company makes 20 percent of its sales for cash and 80 percent on credit. Of the credit sales, 50 percent are collected in the month after the sale and 50 percent are collected two months later. Archer pays for 2 percent of its purchases in the month after purchase and 80 percent two months after. Labor expense equals 15 percent of the current month's sales. Overhead expense equals $12,500 per month. Interest payments of $32,500 are due in June and September. A cash dividend of $52,500 is scheduled to be paid in June. Tax payments of $25,500 are due in June and September. There is a scheduled capital outlay of $350,000 in September. Archer Electronics' ending cash balance in May is $22,500. The minimum desired cash balance is $10,500. a. Prepare a schedule of monthly cash receipts for June through September. Archer Electronics Cash Receipts Schedule May June July August September April Sales Credit sales a. Prepare a schedule of monthly cash receipts for June through September. Archer Electronics Cash Receipts Schedule June April May July August September Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts $ $ 0 $ 0 $ b. Prepare a schedule of monthly cash payments for June through September Archer Electronics Cash Payments Schedule May June April July August September Materials purchases Materials: One month after purchase Materials: Two months after purchase Labor expense Overhead expense Interest payments Dividend payments Tax payments Capital outlay Total payments $ 0 0 $ 0 $ 0 $ c. Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cash balance is $50,500. Excess cash (above $50,500) is used to buy marketable securities. Marketable securities are sold before borrowing funds in case of a cash shortfall (less than $10,500). (Negative amounts should be indicated by a minus sign. Assume the June beginning loan balance and beginning marketable security balance is $0.) Archer Electronies Cash Budget June July August September 49 0 $ 0 $ 0 $ 0 $ $ 0 $ 0 $ 0 $ Total cash receipts Total cash payments Net cash flow Beginning cash balance Cumulatie cash balance Borrow Repay loan Sell marketable securities Buy marketable securities Ending cash balance Cumulative loan balance Cumulative marketable securities 0 0 $ 0 $ $
