1. Cash Budget

Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She must prepare a Cash Budget for the last six months of 2020. She has estimated the following sales forecast for the firm for parts of 2020 and 2021:

Month:	Sales Forecast:
May 2020	$180,000
June	180,000
July	360,000
August	540,000
September	720,000
October	360,000
November	360,000
December	90,000
January 2021	180,000

Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%, collected the previous month of sale, 75%, collected two previous months, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials:

Month:	Costs:
May 2020	$ 90,000
June	90,000
July	126,000
August	882,000
September	306,000
October	234,000
November	162,000
December	90,000

General and administrative salaries are approximately $27,000 a month. Lease payments under long-term leases are $9,000 a month. Depreciation charges are $36,000 a month. Miscellaneous expenses are $2,700 a month. Income tax payments are due in September and December of $10,000. A progress payment of $150,000 on a new design studio must be paid in October. Cash on hand in July 1 will be $132,000 and a minimum cash balance of $90,000 should be maintained throughout the cash budget period.

II. Short-term Financial Planning- Working Capital Policies

Zocco Corp. Have a ICP (Inventory Conversion Period) of 75 days, a ACP (Average Collection Period) of 38 days, and a APP (Acconts Payable Period) of 30 days.

Compute:

1. Cash Conversion Cycle-
2. If annual sales were $3,421.875, what is the investment in Accounts receivable?
3. What is Zoccos Inventory Turnover? Assume the Cost of Goods Sold is 75% of sales.