\fMARLEY WHOLESALE CASH BUDGET July August September Cash balance at beginning of month $20.000 $168.000 $53,400 Add: Cash receipts Bank loan 194.000 Collections on receivables (Schedule 1) 120.000 280.000 345,000 Total cash available $334.00 $448,000 $398,000 Less: Cash payments for Purchase of equipment 16.000 Accounts payable (Schedule 4) 150,000 394.600 235,900 Cash balance at end of month $168,000 $53,400 $162,500 Schedule 1: Estimated collections on receivables Beginning balance of receivables $120.000 $40,000 July sales ($300,000 x 80%) 240.000 July sales ($300,000 x 19%) $57,000 August sales ($360,000 x 80%) 288,000 Total cash collection $120,000 $280,000 $345,000 Schedule 2: Estimated merchandise purchases Sales $300.000 $360.000 $270,000 Cost of goods sold (Sales per month x 65%) $195,000 $234,000 $175,500 Add: Ending inventory 234,000 175,500 130,000 Total inventory required $429,000 $409.500 $305,500 Less: Beginning inventory 90.000 234,000 175,500 Total merchandise purchases $339,000 | $175,500 $130,000Schedule 3: Estimated payments for operating expenses Operating expenses $36.000 $36.000 $36,000 Add: Sales x 8% 24.000 28.800 21,600 Total operating expense $60.000 $64.800 $57,600 Less: Depreciation expense 4.400 4.400 4,400 Total operating expense $55,600 $60,400 $53,200 Schedule 4: Accounts payable for merchandise purchases Beginning balance of accounts payable $150.000 Add: Merchandise purchases $339,000 $175,500 Operating expense 55.600 60.400 Total accounts payable $150,000 $394,600 $235,900 b. Based on the cash forecast, Marley Wholesale will not be able to repay the $200,000 bank loan at the end of September, because the ending cash balance would be $162,500 in September. |