Bobcat Printingmakes customt---shirts and other promotional productsforstudent organizations and ... Bobcat Printingmakes customt---shirts and other promotional productsforstudent 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 are budgeted at $30,000 for Month 1, $32,500 for Month 2, and $34,000 for Month 3. All sales will be done on account. Company does not expect to have any cash sales. b. Sales are collected 50% in the month of the sale, and 50% 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 3% of sales; miscellaneous is 1% of sales; and rent is $5,000 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 a building in Month 3 for $8,000 in cash. h. They would like to maintain a minimum cash balance of $2,500 at the end of each month. The company has an agreement with a local bank that allows them to borrow, with a total line of credit of $20,000. The interest rate on these loans is 1% per month (12% annual). They would as far as able, repay the loan on the last day of the month when it has enough cash to pay the full balance and maintain an adequate ending cash balance. i. The owner makes a draw of $5,000 every month. (Note: sole proprietors and partnerships take owners draws, while stockholders receive dividends). When making calculations always round up (for example: 33 7% = 2.31, round up to 3.00). Check Figures: Gross Margin $57,900 Total assets $27,973 Ending Retained Earnings $14,373

Month ($)
	1	2	3
Sales	30000	32500	34000
Opening Cash Balance	0	2500	4683
Cash Recd from Sales
Current Month Sales	15000	16250	17000
Previous Month Sales Cash Recd		15000	16250
Total Cash Inflows	15000	33750	37933
Cost of Goods Sold-40% of Sales	12000	13000	13600
Payment of Previous Month Purchase		12000	13000
Sellinng, General and Administrative Expense
Donations-10% of Sales	3000	3250	3400
Advertisement-3% of Sales	900	975	1020
Misc-1% of Sales	300	325	340
Rent	5000	5000	5000
Interest on Borrowings		17
Drawings	5000	5000	5000
Building Purchase			8000
Total Cash Outflows	14200	26567	35760
Surplus/(Deficiency)	800	7183	2173
Amount to be Borrow/(Repaid)	1700	-2500	0
Minimum Cash Balance	2500	2500	2500
Actual Cash Balance	2500	4683	2173

23 . What is the projected interest expense for the first quarter of operations? A. $170 B. $14 C. $34 D. $17

24 . What is the projected net income the first quarter of operations? A. $14,446 B. $7,650 C. $13,200 D. $29,373

25. What is the projected beginning capital investment for the first quarter of operations? A. $0 B. Cannot be determined C. $3,985 D. $1,500

26 . What is the projected total owner's equity for the first quarter of operations? A. $14,373 B. $6,240 C. $2,973 D. $12,000

27. What is the projected ending cash balance for the first quarter of operations? A. $12,846 B. $2,973 C. $0 D. $3,846

28 . What is the projected accounts receivables balance for the first quarter of operations? A. $17,000 B. $8,400 C. $6,250 D. $14,200

29 . What is the projected account payable for the first quarter of operations? A. $13,600 B. $9,100 C. $8,000 D. $6,400

30 . What is the projected interest payable for the first quarter of operations? A. $0 B. $14 C. $19 D. $34

31. Points What is the projected net cash flow from operating activities for the first quarter of operations? A. $0 B. $14,446 C. $12,846 D. $25,973

32 . What is the projected net cash flow for investing activities for the first quarter of operations? A. ($3,000) B. $8,000 C. ($8,000) D. $3,000

33. What is the projected cash flow from financing activities for the first quarter of operations? A. ($15,000) B. $15,000 C. $1,700 D. ($1,700) E. ($16,700)