Excel Activity: Cash Budgeting Helen Bowers, owner of Helen's Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2021 and 2022: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 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: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 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: General and administrative salaries are approximately $36,000 a month. Lease payments under long-term leases are $12,000 a month. Depreciation charges are $48,000 a month. Miscellaneous expenses are $5,400 a month. Income tax payments of $65,000 are due in September and December. A progress payment of $170,000 on a new design studio must be paid in October. Cash on hand on July 1 will b $128,000, and a minimum cash balance of $85,000 should be maintained throughout the cash budget period. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Round your answers to the nearest dollar. If your answer is zero, enter " 0 ". Download spreadsheet Cash Budgeting-f3c289.x|sx Cash Budgeting \begin{tabular}{lr} Collections during month of sale & 10% \\ Collections during 1st month after sale & 100% \\ Collections during 2nd month after sale & 15% \\ General and administrative salaries & $36,000 \\ Lease payments & $12,000 \\ Depreciation charges & $48,000 \\ Miscellaneous expenses & $5,400 \\ Income tax payments (Sep \& Dec) & $65,000 \\ New design studio payment (Oct) & $170,000 \\ Cash on hand on July 1 & $128,000 \\ Minimum cash balance & $85,000 \\ Sales adjustment factor & 0% \end{tabular} Sales Costs of labor and raw materials \begin{tabular}{ccccccccc} May & June & July & August & September & October & November & December & January \\ \hline$190,000 & $190,000 & $380,000 & $570,000 & $780,000 & $380,000 & $380,000 & $95,000 & $190,000 \end{tabular} a. Prepare a monthly cash budget for the last 6 months of 2021. All payments and expenses should be entered as positive numbers. Net cash losses, negative cash balance, negative cumulative cash, and cumulative loans outstanding, if any, should be indicated by a minus sign. h budget for the last 6 months of 2021. All payments and expenses should be entered as positive numbers. Net cash balance, negative cumulative cash, and cumulative loans outstanding, if any, should be indicated by a b. Prepare monthly estimates of the required financing or excess funds-that is, the amount of money Bowers will need to borrow or will have available to invest. Required financing, if any, should be indicated by a minus sign. e. If Bowers' customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales declined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement. Enter your answers as positive numbers. To complete the sensitivity analysis, follow these steps in excel: - Ensure that cell A60 is a reference to cell B56 (i.e. "=B56"). - Select/highlight cells A60 through H69 (A60:H69). - From the top ribbon, select Data > Forecast > What-If-Analysis > Data Table - For row input cell click on cell B5 or enter $B$5. - For column input cell click on cell B14 or manually enter $B$14. - Click "Ok". \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{14}{|c|}{% Collections in 2 nd month } \\ \hline & 0% & & 15% & & 30% & & 45% & & 60% & & 75% & & 90% \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & 1 & $ & \\ \hline$ & & $ & & $ & & $ & & & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & e2 & $ & = & $ & & $ & \\ \hline \end{tabular} Excel Activity: Cash Budgeting Helen Bowers, owner of Helen's Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2021 and 2022: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 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: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 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: General and administrative salaries are approximately $36,000 a month. Lease payments under long-term leases are $12,000 a month. Depreciation charges are $48,000 a month. Miscellaneous expenses are $5,400 a month. Income tax payments of $65,000 are due in September and December. A progress payment of $170,000 on a new design studio must be paid in October. Cash on hand on July 1 will b $128,000, and a minimum cash balance of $85,000 should be maintained throughout the cash budget period. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Round your answers to the nearest dollar. If your answer is zero, enter " 0 ". Download spreadsheet Cash Budgeting-f3c289.x|sx Cash Budgeting \begin{tabular}{lr} Collections during month of sale & 10% \\ Collections during 1st month after sale & 100% \\ Collections during 2nd month after sale & 15% \\ General and administrative salaries & $36,000 \\ Lease payments & $12,000 \\ Depreciation charges & $48,000 \\ Miscellaneous expenses & $5,400 \\ Income tax payments (Sep \& Dec) & $65,000 \\ New design studio payment (Oct) & $170,000 \\ Cash on hand on July 1 & $128,000 \\ Minimum cash balance & $85,000 \\ Sales adjustment factor & 0% \end{tabular} Sales Costs of labor and raw materials \begin{tabular}{ccccccccc} May & June & July & August & September & October & November & December & January \\ \hline$190,000 & $190,000 & $380,000 & $570,000 & $780,000 & $380,000 & $380,000 & $95,000 & $190,000 \end{tabular} a. Prepare a monthly cash budget for the last 6 months of 2021. All payments and expenses should be entered as positive numbers. Net cash losses, negative cash balance, negative cumulative cash, and cumulative loans outstanding, if any, should be indicated by a minus sign. h budget for the last 6 months of 2021. All payments and expenses should be entered as positive numbers. Net cash balance, negative cumulative cash, and cumulative loans outstanding, if any, should be indicated by a b. Prepare monthly estimates of the required financing or excess funds-that is, the amount of money Bowers will need to borrow or will have available to invest. Required financing, if any, should be indicated by a minus sign. e. If Bowers' customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales declined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement. Enter your answers as positive numbers. To complete the sensitivity analysis, follow these steps in excel: - Ensure that cell A60 is a reference to cell B56 (i.e. "=B56"). - Select/highlight cells A60 through H69 (A60:H69). - From the top ribbon, select Data > Forecast > What-If-Analysis > Data Table - For row input cell click on cell B5 or enter $B$5. - For column input cell click on cell B14 or manually enter $B$14. - Click "Ok". \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{14}{|c|}{% Collections in 2 nd month } \\ \hline & 0% & & 15% & & 30% & & 45% & & 60% & & 75% & & 90% \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & & $ & & $ & 1 & $ & \\ \hline$ & & $ & & $ & & $ & & & & $ & & $ & \\ \hline$ & & $ & & $ & & $ & e2 & $ & = & $ & & $ & \\ \hline \end{tabular}