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 2016 and 2017: May 2016 une uly $186,000 186,000 372,000 720,000 October 360,000 90,000 180,000 anuary 2017 Estimates regarding payments obtained on the redit department are as follows collected within the month of sale, 109 ; oollected the month follow ng he sale, 75%; collected the second month ollo ng the sale, 15%, payments for labor and raw materials are made the month aftor these servicas were provided. Hore are the estimated costs of labar plus raw materials: May 2016 une July 90,000 90,000 126,000 991,000 207,000 234,000 162,000 90,000 October General and admi strative salaries are approximately $26,000 a month. Lease payments under long-term eases are $9,000 a month. De reciat n darges are $36,000 a month. Ms e aneous expenses are 2,600 a month Income tax payments of $64,000 a due in September and December. A progress payment of $100,000 on a new design studio must be paid n October. Cash on hand on July 1 wil be 132,000, and a minimum cash balance of S90,000 should be mantained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2016. If no entry required, enter 0",Use minus sign to enter losses, loans outstanding or any other negative amounts, June July August September October anuary Sales (gross) 186000 $ 186000 $ 372000 540000 720000 $ 360000 360000 90000 During month of sale During 1st month after sale During 2nd month after sale Total collections 72000 405000 55800 18600 18600 37200 139000 27900 36000 540000 81000 139000 270000 54000 $ 204600 360900 532800 $ 657000 $ 414000 333000 279000 270000 27900 108000 Labor and raw materials Payments for labor and raw materials 90000 $ 126000 881000 307000 $ 234000 $ 162000 90000 90000 126000 881000 $ 307000 S 234000 162000 Cash gain or loss for month Collections Payments for labor and raw materials General and administrative salaries Lease payments Miscellaneous expenses Income tax payments Design studio payment Total payments Net cash gain (loss) during month 204600360900 558006 6570004140 00333000 881000 307000 234000 162000 26000 26000 26000 2600 2600 2600 2600 2600 2600 64000 64000 $ 151000 163600 $ 919600 $ 379600 $ 271600 263000 53600197300$-86380O277400 142400 Loan requirement or cash surplus Cash at start of month Cumulative cash Target cash balance Cumulative surplus cash or loans outstanding to maintain $90,000 target cash balance 132000 8 b. Prepare monthly estimates of the required financing or excess funds that is, the amount of money Bowers will need to borrow or wil have avalable to invest. Round your answers to the nearest dolar. Enter loans outstanding with minus sign. of the required financing e to invest. Round your July August September October November December c. Now supposeraceptsmsles uniformly during the manth (that is, cash racoitscoma in at the rate of 1/3D or 1/31 each day), but all autflows must be paid on the sth. will this affect the cash budgat? That is, wilthe cash budget you prepared be valid under these assumptions? If not, what could be dane to make a valid estimate of the peak financing requirements? No calculations are required, athough if you prefer, you can use calculations to illustrate the effects The input in the box below will not be graded, but may be reviewed and considered by your instructor d. Bowers' sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, disauss how the company's current and deht ratios would vary during the year if all financal requirements were met with short- term bank loans. Could changes in these ratios affect the firm's ability to obtain hank cradit? Explain. The input in the box below will nat be graded, but may be reviewed and considered by your instructor 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 2016 and 2017: May 2016 une uly $186,000 186,000 372,000 720,000 October 360,000 90,000 180,000 anuary 2017 Estimates regarding payments obtained on the redit department are as follows collected within the month of sale, 109 ; oollected the month follow ng he sale, 75%; collected the second month ollo ng the sale, 15%, payments for labor and raw materials are made the month aftor these servicas were provided. Hore are the estimated costs of labar plus raw materials: May 2016 une July 90,000 90,000 126,000 991,000 207,000 234,000 162,000 90,000 October General and admi strative salaries are approximately $26,000 a month. Lease payments under long-term eases are $9,000 a month. De reciat n darges are $36,000 a month. Ms e aneous expenses are 2,600 a month Income tax payments of $64,000 a due in September and December. A progress payment of $100,000 on a new design studio must be paid n October. Cash on hand on July 1 wil be 132,000, and a minimum cash balance of S90,000 should be mantained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2016. If no entry required, enter 0",Use minus sign to enter losses, loans outstanding or any other negative amounts, June July August September October anuary Sales (gross) 186000 $ 186000 $ 372000 540000 720000 $ 360000 360000 90000 During month of sale During 1st month after sale During 2nd month after sale Total collections 72000 405000 55800 18600 18600 37200 139000 27900 36000 540000 81000 139000 270000 54000 $ 204600 360900 532800 $ 657000 $ 414000 333000 279000 270000 27900 108000 Labor and raw materials Payments for labor and raw materials 90000 $ 126000 881000 307000 $ 234000 $ 162000 90000 90000 126000 881000 $ 307000 S 234000 162000 Cash gain or loss for month Collections Payments for labor and raw materials General and administrative salaries Lease payments Miscellaneous expenses Income tax payments Design studio payment Total payments Net cash gain (loss) during month 204600360900 558006 6570004140 00333000 881000 307000 234000 162000 26000 26000 26000 2600 2600 2600 2600 2600 2600 64000 64000 $ 151000 163600 $ 919600 $ 379600 $ 271600 263000 53600197300$-86380O277400 142400 Loan requirement or cash surplus Cash at start of month Cumulative cash Target cash balance Cumulative surplus cash or loans outstanding to maintain $90,000 target cash balance 132000 8 b. Prepare monthly estimates of the required financing or excess funds that is, the amount of money Bowers will need to borrow or wil have avalable to invest. Round your answers to the nearest dolar. Enter loans outstanding with minus sign. of the required financing e to invest. Round your July August September October November December c. Now supposeraceptsmsles uniformly during the manth (that is, cash racoitscoma in at the rate of 1/3D or 1/31 each day), but all autflows must be paid on the sth. will this affect the cash budgat? That is, wilthe cash budget you prepared be valid under these assumptions? If not, what could be dane to make a valid estimate of the peak financing requirements? No calculations are required, athough if you prefer, you can use calculations to illustrate the effects The input in the box below will not be graded, but may be reviewed and considered by your instructor d. Bowers' sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, disauss how the company's current and deht ratios would vary during the year if all financal requirements were met with short- term bank loans. Could changes in these ratios affect the firm's ability to obtain hank cradit? Explain. The input in the box below will nat be graded, but may be reviewed and considered by your instructor