Bfin

Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual Forecast Additional Information November $340,000 January $420,000 April forecast $470, 000 December 360,000 February 460, 000 March 480, 000 Of the firm's sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 40 percent are paid in the month after sale and 60 percent are paid in the second month after the sale. Materials cost 35 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 40 percent of sales and is paid in the month of sales. Selling and administrative expense is 6 percent of sales and is also paid in the month of sales. Overhead is $31,500 in cash per month; Amortization expense is $10,700 per month. Taxes nces of $8,700 will be paid in January and dividends of $5,500 will be paid in March. Cash at the beginning of January is $94,000, and the minimum desired cash balance is $89,000. a. Prepare a schedule of monthly cash receipts for January, February and March. WJim Daniels Health Products Cash Receipts Schedule November December January February March April Sales $ $ $ $ $ $ Credit sales Cash sales Collections in the month after credit sales Collections two months after credit sales Total cash receipts $