Financial Managment

(Cash budget) The Sharpe Corporation's projected sales for the first 8 months of 2019 are shown in the following table Of Sharpe's sales, 10 percent is for cash, another 50 percent is collected in the month following the sales, and 40 percent is collected in the second month following sales. November and December sales for 2018 were $200,000 and $155,000, respectively Sharpe purchases its raw materials 2 months in advance of its sales. The purchases are equal to 60 percent of the final sales price of Sharpe's products. The supplier is paid 1 month after it makes a delivery. For example, purchases for April sales are made in February, and payment is made in March In addition Sharpe pays $8,000 per month for rent and $20,000 each month for other expenditures, Tax prepayments of $20,000 are made each quarter, beginning in March The company's cash balance on December 31, 2018, was $24,000 This is the minimum balance the firm wants to maintain a. Prepare a cash budget for Sharpe covering the first 7 months of 2019 Fill in the Collections for the month of January (Round to the nearest dollar) Nov Dec Jan Mar Apr May June July Sales $200,000 $155,000 $170,000 $100,000 $115,000 $220,000 $280,000 $250,000 $205.000 Collections Month of sale (10%) First month (50%) Second month (40%) Total Collections Feb Enter your answer in edit fields and then click Check Answer. 7 parts Clear All Check Answer remaining FICUT OUICHI y, and pay 1 HOUC HI MICI In addition, Sharpe pays $8,000 per month for rent and $20,000 each month for other expenditures. Tax prepayments of $20.000 are made each quarter, beginning in March The company's cash balance on December 31, 2018, was $24,000. This is the minimum balance the firm wants to maintain Any borrowing that is needed to maintain this minimum is paid off in the subsequent month if there is sufficient cash. Interest on short-term loans (12 percent) is paid monthly Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional $60,500, these funds would be borrowed at the beginning of April with interest of $605 ( 12x1/12 $60,500) owed for April and paid at the beginning of May a. Prepare a cash budget for Sharpe covering the first 7 months of 2019. b. Sharpe has $200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes? a. Prepare a cash budget for Sharpe covering the first 7 months of 2019. Fill in the Collections for the month of January (Round to the nearest dollar.) Nov Jan Dec Feb Mar Apr June May July Sales $200,000 $155,000 $170,000 $100,000 $115,000 $220,000 $280 000 $250,000 $205,000 Collections Month of sale (10%) First month (50%) Second month (40%) Total Collections Enter your answer in the edit fields and then click Check Answer 7 parts remaining Clear All Check Answer budget) The Sharpe Corporation's projected sales for the first 8 months of 2019 are shown in the following table: arpe's sales, 10 percent is for cash, another 50 percent is collected in the month following the sales and 40 percent is Eted in the second month following sales. November and December sales for 2018 were $200,000 and $155,000 ectively pe purchases its raw materials 2 months in advance of its sales. The purchases are equal to 60 percent of the final sales of Sharpe's products. The supplier is paid 1 month after it makes a delivery. For example, purchases for April sales are ein February, and payment is made in March Data Table - X (Click on the following icon January February March in order to copy its contents into a spreadsheet.) $170,000 May 100,000 June 115,000 July 220,000 August $280,000 250,000 205,000 130,000 Apni Print Done er your answer in the edit fields and then click Check Answer parts remaining Clear All