Cash Budgeting

Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Kochi's Dall Stiop. Business has been good, but Koehl frequently runs out of cash. This has necessitated late payment on certain orders, which is heginning to cause a problem with suppliers. Kochl plans to borrow from the bank to have. cash ready as needed, but first she needs a forecast of just how much she must borrow. Accordingly, she has asked you to prepare a cash budget for the crical period around Christmas, when needs will be especially high. Sales are made on a cash basis only. Koehl's purchases must be paid for during the following month. Koehl pays herself a salary of $4, 300 per month, and the rent is $2,300 per month. In addition, she must make a tax payment of $10,000 in December. The current cash gh hand (on December 1 ) is 5400 , but Koehl has agreed to maintain an average bank balance of $4,000 - this is her target cash balance. (Disregard the amount in the cash register, which is insignificant because Koehl keeps only a small amount on hand in order to lessen the chances of robbery.) The estimated sales and purchases for December, January, and February are shown below. Purchases during November amounted to $150,000. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below: a. Prepare a cash budget for December, January, and February. Use a minus sign to enter negative values for net cash flows, cumulative NCF values, and loans. necded, if any. If the answer is zero, enter +0. Do not round intermediate calculations. Round your answers to the nearest dollar. b. Suppose Koehl starts selling on a credit basis on December 1, giving customers 30 days to pay. All customers accept these terms, and all other facts in the problem are unchanged. What would the company's ioan requirervents be at the end of December in this case? (Hint; The calculations required to answer this question are minimal.) Use a minus sign to enter a negative value for loan requirements. Do not round intermedate calculations. Round your answer to the nearest dollat