Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl's Doll Shop. Business has been good, but Koehl frequently runs out of cash. This has necessitated late payment on certain orders, which is beginning to cause a problem with suppliers. Koehl 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 critical 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 $4,200 per month, and the rent is $2,300 per month. In addition, she must make a tax payment of $14,000 in December. The current cash on hand (on December 1 ) is $350, but Koehl has agreed to maintain an average bank balance of $5,500 - 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 $120,000. 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. 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. Dpen spreadsheet 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 needed, if any. If the answer is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest dollar. Collections and Purchases: Collections and Purchases: 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 loan requirements 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 intermediate calculations. Round your answer to the nearest dollar. Cash Budgeting \begin{tabular}{|l|r|} \hline Monthly salary & $4,200 \\ \hline Monthly rent & $2,300 \\ \hline December tax payment & $14,000 \\ \hline Current cash on hand, December 1 & $350 \\ \hline Target cash balance & $5,500 \\ \hline November purchases & $120,000 \\ \hline December sales & $170,000 \\ \hline December purchases & $25,000 \\ \hline January sales & $44,000 \\ \hline January purchases & $25,000 \\ \hline February sales & $70,000 \\ \hline February purchases & $25,000 \\ \hline \end{tabular} Cash Budget : Sales (Collections) \begin{tabular}{c|c|c} December & January & February \\ \hline$170,000 & $44,000 & $70,000 \end{tabular} Purchases $25,000$25,000$25,000 Payments: For purchases Salary Rent Taxes Total payments \begin{tabular}{|r|r|r|} \hline & & \\ \hline$4,200 & $4,200 & $4,200 \\ $2,300 & $2,300 & $2,300 \\ \hline 14,000 & & \\ \hline & \\ \hline \hline \end{tabular} Cash at start of forecast $350 Payments: For purchases Salary Rent Taxes Total payments Cash at start of forecast $350 Net cash flow Cumulative NCF Target cash balance $5,500$5,500$5,500 Surplus cash or loans needed Suppose firm sells on credit: Number of days customers have to pay 30 Company loan requirements on December 31 Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl's Doll Shop. Business has been good, but Koehl frequently runs out of cash. This has necessitated late payment on certain orders, which is beginning to cause a problem with suppliers. Koehl 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 critical 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 $4,200 per month, and the rent is $2,300 per month. In addition, she must make a tax payment of $14,000 in December. The current cash on hand (on December 1 ) is $350, but Koehl has agreed to maintain an average bank balance of $5,500 - 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 $120,000. 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. 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. Dpen spreadsheet 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 needed, if any. If the answer is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest dollar. Collections and Purchases: Collections and Purchases: 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 loan requirements 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 intermediate calculations. Round your answer to the nearest dollar. Cash Budgeting \begin{tabular}{|l|r|} \hline Monthly salary & $4,200 \\ \hline Monthly rent & $2,300 \\ \hline December tax payment & $14,000 \\ \hline Current cash on hand, December 1 & $350 \\ \hline Target cash balance & $5,500 \\ \hline November purchases & $120,000 \\ \hline December sales & $170,000 \\ \hline December purchases & $25,000 \\ \hline January sales & $44,000 \\ \hline January purchases & $25,000 \\ \hline February sales & $70,000 \\ \hline February purchases & $25,000 \\ \hline \end{tabular} Cash Budget : Sales (Collections) \begin{tabular}{c|c|c} December & January & February \\ \hline$170,000 & $44,000 & $70,000 \end{tabular} Purchases $25,000$25,000$25,000 Payments: For purchases Salary Rent Taxes Total payments \begin{tabular}{|r|r|r|} \hline & & \\ \hline$4,200 & $4,200 & $4,200 \\ $2,300 & $2,300 & $2,300 \\ \hline 14,000 & & \\ \hline & \\ \hline \hline \end{tabular} Cash at start of forecast $350 Payments: For purchases Salary Rent Taxes Total payments Cash at start of forecast $350 Net cash flow Cumulative NCF Target cash balance $5,500$5,500$5,500 Surplus cash or loans needed Suppose firm sells on credit: Number of days customers have to pay 30 Company loan requirements on December 31