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Case 10-59 Sports Fanatic Company is a retail sporting goods store that uses accrual accounting for its records. Information on Sports Fanatics operations are as

Case 10-59

Sports Fanatic Company is a retail sporting goods store that uses accrual accounting for its records. Information on Sports Fanatics operations are as follows:
1. The store has budgeted sales at $220,000 for January and $200,000 for February.
2. It expects collections to be 60% in the month of sale and 38% in the month following the sale. It expects 2% of sales to be uncollectible.
3. Gross margin is 25% of sales.
4. It purchases a total of 80% of the merchandise for resale in the month before the month of sale and 20% in the month of sale. It makes payments for merchandise in the month after it purchases it.
5. Other expected monthly expenses to be paid in cash amount to $22,600.
6. Annual depreciation is $216,000.
7. Sports Fanatics balance sheet at the close of business on December 31 follows.
SPORTS FANATIC COMPANY Balance Sheet December 31
Assets
Cash $22,000
Accounts receivable (net of $4,000 allowance for uncollectible accounts) 76,000
Inventory 132,000
Property, plant, and equipment (net of $680,000 of accumulated depreciation) 870,000
Total assets $1,100,000
Liabilities and Shareholders Equity
Accounts payable $162,000
Common shares 800,000
Retained earnings 138,000
Total liabilities and shareholders equity $1,100,000

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Prepare the cash budget for January. (Do not leave any answer field blank. Enter 0 for amounts.
SPORTS FANATIC COMPANY Cash Budget For the Month of January

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