Dr. Vinny Bumbattez (PhD in Accounting) is the CFO of Dowecheatem Inc. and has asked you his Senior Finance manager (a recent graduate of the GBM program at Humber College) to prepare the Cash Budget for next year 2021. The Vice President of sales Henry Scully (also a graduate of Humber College) has provided you with the following quarterly sales estimates in millions of Canadian Dollars. (Mr. Scully has used an exchange rate of $1.48 for any USD sales in his conversion to Cdn dollars) Q1 - $160; Q2 - $ 175; Q3 - $190; Q4 - $215. Sales for Q1 of 2022 are projected to be $170. At the beginning of the year Accounts Receivable are going to be $68 million. The company has a 45 day collection period.

The companys purchases from suppliers in a quarter are equal to 45% of next quarters forecasted sales, and suppliers are normally paid in 36 days. Wages, rent and other expenses are estimated to be 25% of sales. Interest expense and dividends are $12 million per quarter.

The company plans a capital project which will cost $75 million in the second quarter. The company will start the year with a $49 million cash balance and is required to maintain a $30 million minimum bank balance due to existing borrowing covenants. The CFO would like to reduce this requirement by 50% in 4 years time when current commitments come due.

Prepare a detailed schedule that shows the cash inflows and disbursements by quarter. Once the detailed schedule is done use those figures to complete the cash budget schedule below. In order to be awarded any marks, students must show all their work.