Cash Budget Friendly Freddie's is an independently owned major appliance and electronics discount chain with seven stores located in a Midwestern metropolitan area. Rapid expansion has created the need for careful planning of cash requirements to ensure that the chain is able to replenish stock adequately and meet payment schedules to creditors. Fred Ferguson, founder of the chain, has established a banking relationship that provides a $200,000 line of credit to Friendly Freddie's. The bank requires that a minimum balance of $8,140 be kept in the chain's checking account at the end of each month. When the balance goes below $8,140, the bank automatically extends the line of credit in multiples of $1,000 so that the checking account balance is at least $8,140 at month-end Friendly Freddie's attempts to borrow as little as possible and repays the loans quickly in multiples of $1,000 plus 2 percent monthly interest on the entire loan balance. Interest payments and any principal payments are paid at the end of the month following the loan. The chain currently has no outstanding loans The following cash receipts and disbursements data apply to the fourth quarter of the current calendar year. Estmated beginning cash balance s 8,920 Estimated cash sales 13,510 29,260 44,020 October November December Sales on account 130,20 Duly (actual) Sales on account: July (actual) August (actual September (actual) October (estimated) November (estimated) December (estimated) 130,200 104,100 128,200 134,700 142,300 187,500 Projected cash collection of sales on account is estimated to be 72 percent in the month following the sale, 18 percent in the second month following the sale, and 7 percent in the third month following the sale. The 3 percent beyond the third month following the sale is determined to be uncollectible. In addition, the chain is scheduled to receive $12,900 cash on a note receivable in October All inventory purchases are made on account as the chain has excellent credit with all vendors because of a strong payment history. The followno information regarding inventory purchases is available. Inventory Purchases September (actual) $ 120,000 October (estimated) 112,100 November (estimated) 127,700 December (estimated) 94,100 Cash disbursements for inventory are made in the month following purchase using an average cash discount of 3 percent for timely payment Monthly rash dishirsements forneratin nenses tuirin Drtrher Nnuemher and Decemher are estimatert tn he 138.am, 41s, and stn Previous P Prepare Friendly Freddie's cash budget for the months of October, Now ember and December showing all recepts, disbursements, and credit line activity where applicable. (CMA adapted). Enter all cash disbursements as positive values. If a cash balance is negative, enter the amount as a negative value. If an amount is zero, enter "o" Friendly Freddie's Cash Budget October through December October November December Beginning cash balance Recelpts: Cash sales Colections of sales on account Note recenvable repayment Total cash avalable Disbursements: Payment of inventory purchases Operating expenses Loan repayment Interest Total dsbursements Friendly Freddie's Cash Budget October through December october November December Beginning cash balance Recepts Cash sales Colections of sales on account Note recevable repayment Total cash avaiable Payment of inventory purchases Operating expenses Loan repayment Interest Total disbursements Cash babnce Bank loan Adjusted cash balance Cash Budget Friendly Freddie's is an independently owned major appliance and electronics discount chain with seven stores located in a Midwestern metropolitan area. Rapid expansion has created the need for careful planning of cash requirements to ensure that the chain is able to replenish stock adequately and meet payment schedules to creditors. Fred Ferguson, founder of the chain, has established a banking relationship that provides a $200,000 line of credit to Friendly Freddie's. The bank requires that a minimum balance of $8,140 be kept in the chain's checking account at the end of each month. When the balance goes below $8,140, the bank automatically extends the line of credit in multiples of $1,000 so that the checking account balance is at least $8,140 at month-end Friendly Freddie's attempts to borrow as little as possible and repays the loans quickly in multiples of $1,000 plus 2 percent monthly interest on the entire loan balance. Interest payments and any principal payments are paid at the end of the month following the loan. The chain currently has no outstanding loans The following cash receipts and disbursements data apply to the fourth quarter of the current calendar year. Estmated beginning cash balance s 8,920 Estimated cash sales 13,510 29,260 44,020 October November December Sales on account 130,20 Duly (actual) Sales on account: July (actual) August (actual September (actual) October (estimated) November (estimated) December (estimated) 130,200 104,100 128,200 134,700 142,300 187,500 Projected cash collection of sales on account is estimated to be 72 percent in the month following the sale, 18 percent in the second month following the sale, and 7 percent in the third month following the sale. The 3 percent beyond the third month following the sale is determined to be uncollectible. In addition, the chain is scheduled to receive $12,900 cash on a note receivable in October All inventory purchases are made on account as the chain has excellent credit with all vendors because of a strong payment history. The followno information regarding inventory purchases is available. Inventory Purchases September (actual) $ 120,000 October (estimated) 112,100 November (estimated) 127,700 December (estimated) 94,100 Cash disbursements for inventory are made in the month following purchase using an average cash discount of 3 percent for timely payment Monthly rash dishirsements forneratin nenses tuirin Drtrher Nnuemher and Decemher are estimatert tn he 138.am, 41s, and stn Previous P Prepare Friendly Freddie's cash budget for the months of October, Now ember and December showing all recepts, disbursements, and credit line activity where applicable. (CMA adapted). Enter all cash disbursements as positive values. If a cash balance is negative, enter the amount as a negative value. If an amount is zero, enter "o" Friendly Freddie's Cash Budget October through December October November December Beginning cash balance Recelpts: Cash sales Colections of sales on account Note recenvable repayment Total cash avalable Disbursements: Payment of inventory purchases Operating expenses Loan repayment Interest Total dsbursements Friendly Freddie's Cash Budget October through December october November December Beginning cash balance Recepts Cash sales Colections of sales on account Note recevable repayment Total cash avaiable Payment of inventory purchases Operating expenses Loan repayment Interest Total disbursements Cash babnce Bank loan Adjusted cash balance