Estimated sales January February March April May

Total Coffee
sales (units) 15,000 16,000 18,000 17,500 14,500

Your friend, Chris Coffee, has been running a successful coffee shop for the last couple of years. He has asked you to put together a cash budget. His regular accountant was too busy to help, but told Chris his depreciation expense was going to be $9,000 per year, using the straight-line method. He has supplied you with the following information (above) to help you put together his cash budget.
The revenue for a coffee is $5 for a large, $4 for a medium and $3 for a small. 50% of his sales are Large coffees, 25% medium and 25% smalls. Chris has a deal with an accounting company and half of the coffees sold are on account, the other half pay cash. The accounting company pays for the coffees the month after the sale. Assume credit sales are half of the total coffee sales.
Material and Labour information Chris has provided:

Large Medium Small
Labour hours 0.1 0.05 0.05
Coffee pods 3 2 1
Cost of a Coffee pod $0.90

Labour is paid at $20/hour. The Coffee pods need to be ordered a month in advance. He requires 10% of next months total coffee pods to be on hand. The beginning coffee pod inventory, February 1, was 3,600 pods. 50% of the Coffee pods are paid in the month they are ordered, 50% are paid the following month.

Other information Chris has provided:

February March April May
Rent 2,500 2,500 2,500 2,500
Dividend 3,000 15,000
Office and Admin 3,500 3,500 3,500 3,500
NOTE: Chris requires a minimum bank balance of $5,000 at the end of the month and the ending January bank balance is $10,000. Chris has access to a line of credit of $500,000 at an interest rate of 30%. Borrowings are made at the beginning of the month and repayments are made at the end of the month.

REQUIRED:
Using the Excel file included with the exam, for the months of February, March and April prepare
Sales Budget, with a cash receipts.
What is the A/R at the end of the month?
Materials Budget, with cash disbursements.
What is the A/P at the end of the month?
Direct Labour Budget
Cash budget