Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information: a. Sales on account are budgeted at $15,000 for Month 1, $23,000 for Month 2, and $30,000 for Month 3. Cash sales are 2,000 in Month 1. Company does not expect to have any cash sales in Month 2 and Month 3. b. Sales are collected 70% in the month of the sale, and 30% in the month following the sale. c. Cost of Goods Sold is budgeted at 40% of Sales. d. Monthly selling, general, and administrative expenses are as follows: donations are 10% of sales; advertising is 8% of sales; miscellaneous is 5% of sales; and rent is $4,500 per month. All SG&A expenses are paid in the month they are incurred. e. Since all of the orders are custom made, no inventory is kept on hand at the end of the month. f. Inventory purchases are paid in full in the month following the purchase. g. Bobcat Printing is planning to purchase an equipment in Month 3 for $5,000 in cash. h. They would like to maintain a minimum cash balance of $2,000 at the end of each month. The company has a line of credit agreement with a local bank to borrow up to $20,000. The interest rate on these loans is 1% per month (12% annual). Bobcat will repay on the last day if has enough cash to pay the full balance and maintain an adequate ending cash balance. i. The owner makes a draw of $3,000 every month. (Note: sole proprietors and partnerships take owners draws, while stockholders receive dividends). Based upon the information provided, complete the operating budgets provided in the excel template, and answer the questions in Canvas. When making calculations always round up (for example: 33 7% = 2.31, round up to 3.00). Check Figures: Gross Margin $42,000 Total assets $16,000 Ending Retained Earnings $3,391

1. What is the total projected sales for the first quarter of operations? 59,000 61,000 68,000 70,000

2. How much cash does Bobcat Printing expect to collect in the first quarter of operations? 59,000 61,000 67,000 70,000

3. What are budgeted cash payments for inventory purchases in the first quarter of operations? 12,000 16,000 21,150 28,000

4. What is the total budgeted Cost of Goods Sold for the first quarter of operations? 12,000 21,200 28,000 32,000

5. What is the total budgeted SG&A expense for the quarter? 29,600 21,380 19,400 9,350

6. What is the projected beginning cash balance for Month 1? $0 300 $2,000 $2,500

7. What is the projected ending cash balance for Month 1?$2,500 $2,000 $0 None of the above.

8. Bobcat Printing will need to borrow money in Month 1? true or false

9. If you answered "True" that Bobcat Printing had to borrow money in the first month, how much money will it need to borrow to ensure it does not have a cash shortage and it meets its cash minimum requirements? $1,800 $1,300 $910 Bobcat Printing does not borrow in the first month.

10. If Bobcat Printing borrowed money in Month 1, what is the projected interest expense it will incur for borrowing the money? a) $18 b)$13 c)$9 d)Bobcat Printing will not have interest because it does not need to borrow money in Month

11. Bobcat Printing will have a cash surplus in Month 2. true or false

12. If Bobcat Printing has a projected cash surplus in Month 2, how much cash will it repay for borrowing on its line of credit? Group of answer choices Bobcat Printing will not have a cash surplus; therefore it will need to borrow more money in Month 2 $910 $1,300 $1,800

13. Bobcat Printing will have cash shortage in Month 3. true or false

14. Bobcat Printing will need to borrow money in Month 3. true or false

15. How much will Bobcat Printing borrow in Month 3? $2,000 Bobcat Printing will not have a projected cash shortage in Month 3, thus it will not borrow money $1,300 $609

16. What is the projected gross profit for the first quarter of operations? $42,000 $40,000 $15,457 $70,000