Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr.! Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual Forecast Additional Information November $320,000 January $400,000 April forecast $400,000 December 340,000 February 440,000 March 410,000 Of the firm's sales, 60 percent are for cash and the remaining 40 percent are on credit. Of credit sales, 20 percent are paid in the month after sale and 80 percent are paid in the second month after the sale. Materials cost 20 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 50 percent of sales and is paid for in the month of sales. Selling and administrative expense is 15 percent of sales and is paid in the month of sales. Overhead expense is $31,000 in cash per month. Depreciation expense is $10,600 per month. Taxes of $8,600 will be paid in January, and dividends of $5,000 will be paid in March. Cash at the beginning of January is $92,000, and the minimum desired cash balance is $87,000. a. Prepare a schedule of monthly cash receipts for January, February, and March. Harry's Carryout Stores Cash Receipts Schedule December January November February March Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts TO LLL c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.) RT 1 March 409,200|| . $ Harry's Carryout Stores Cash Budget January February $ 369,600 $ 404,800 240,000 609,600 4 04,800 92,000 701,600 404,800 Total cash receipts Total cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly loan (or repayment) Ending cash balance Cumulative loan balance I. 409,200 87,000 496,200 701,600 404,800 496,200 Prev of 4 Next