In addition, you also agreed with the CEO that a Cash Budget for the year 2022 and by quarter will be prepared in addition to the operating budgets. The company have never done the cash budget before. Under your supervision, Eric collects necessary information for the preparation of Cash Budget As a matter of company's policy, EdTech maintains a $250,000 minimum cash balance at the end of each quarter. The company can borrow or repay money at an interest rate of 10% per year. Management does not want to borrow any more short-term cash than is necessary. By special arrangement with the bank, EdTech pays interest when repaying the principal. With an agreement with the banks, orrowing (if necessary) takes place at the beginning and repayment at the end of the quartet under consideration (in multiples of $1,000). Interest is computed to the nearest dollar. In view of company's credit policy and collection pattern, the following collection pattern for the 2022 is assumed. All sales in 2022 are on credit. 10% of the sales are collected in the quarter of sales, 90% are collected in the quarter following the sale and the remainder in the following quarter two months after the sale. Cost of purchases of components in each quarter is 70% of the next quarter's projected sales All components purchases (amount per operating budget) are on account, 20% are paid in the quarter of purchase, and the remainder is paid in the quarter following the purchase. Direct manufacturing labour, other wages and salary and payroll-related costs are paid in the quarter in which the labour effort occurs. All other costs are paid in the quarter in which the cost is incurred. Note that depreciation does not require a cash outlay Other cash disbursements. These include outlays for property, plant, equipment, and other long- term investments. Since the company located in the High-Tech zone, it is exempt from income tax for the year 2022 under current tax regulation in force. Balance Sheet as at 31 December 2021 shows the following balances: 31 December 2021 Accounts receivable $24,300,000 Accounts payable $7,200,000 Cash $270,000 Disbursements Schedule Quarters ($) Direct materials Direct Mfg. labour costs Variable mfg. costs Fixed mfg. costs - Depreciation Other costs Q1 Eric calc Per budget Per budget 1,209,000 509,000 700,000 Q2 Q3 04 Full Year Eric cale Eric calc Eric calc Per budget Per budget Per budget Per budget Per budget Per budget 1,209,000 1,209,000 1,209,000 4,836,000 509,000 509,000 509,000 2,036,000 700,000 700,000 700,000 2,800,000 Capital expenditure 5,000,000 Non-mfg. variable costs Per budget Non-mfg. fixed costs 500,000 Interest & repayment If necessary 3,000,000 1,000,000 1,500,000 10,500,000 Per budget Per budget Per budget 500,000 500,000 500,000 2,000,000 If necessary If necessary If necessary If necessary Task 2: 1. Provide the management a Cash Budget (by quarters and full year) for the year ending 31 December 2022 In addition, you also agreed with the CEO that a Cash Budget for the year 2022 and by quarter will be prepared in addition to the operating budgets. The company have never done the cash budget before. Under your supervision, Eric collects necessary information for the preparation of Cash Budget As a matter of company's policy, EdTech maintains a $250,000 minimum cash balance at the end of each quarter. The company can borrow or repay money at an interest rate of 10% per year. Management does not want to borrow any more short-term cash than is necessary. By special arrangement with the bank, EdTech pays interest when repaying the principal. With an agreement with the banks, orrowing (if necessary) takes place at the beginning and repayment at the end of the quartet under consideration (in multiples of $1,000). Interest is computed to the nearest dollar. In view of company's credit policy and collection pattern, the following collection pattern for the 2022 is assumed. All sales in 2022 are on credit. 10% of the sales are collected in the quarter of sales, 90% are collected in the quarter following the sale and the remainder in the following quarter two months after the sale. Cost of purchases of components in each quarter is 70% of the next quarter's projected sales All components purchases (amount per operating budget) are on account, 20% are paid in the quarter of purchase, and the remainder is paid in the quarter following the purchase. Direct manufacturing labour, other wages and salary and payroll-related costs are paid in the quarter in which the labour effort occurs. All other costs are paid in the quarter in which the cost is incurred. Note that depreciation does not require a cash outlay Other cash disbursements. These include outlays for property, plant, equipment, and other long- term investments. Since the company located in the High-Tech zone, it is exempt from income tax for the year 2022 under current tax regulation in force. Balance Sheet as at 31 December 2021 shows the following balances: 31 December 2021 Accounts receivable $24,300,000 Accounts payable $7,200,000 Cash $270,000 Disbursements Schedule Quarters ($) Direct materials Direct Mfg. labour costs Variable mfg. costs Fixed mfg. costs - Depreciation Other costs Q1 Eric calc Per budget Per budget 1,209,000 509,000 700,000 Q2 Q3 04 Full Year Eric cale Eric calc Eric calc Per budget Per budget Per budget Per budget Per budget Per budget 1,209,000 1,209,000 1,209,000 4,836,000 509,000 509,000 509,000 2,036,000 700,000 700,000 700,000 2,800,000 Capital expenditure 5,000,000 Non-mfg. variable costs Per budget Non-mfg. fixed costs 500,000 Interest & repayment If necessary 3,000,000 1,000,000 1,500,000 10,500,000 Per budget Per budget Per budget 500,000 500,000 500,000 2,000,000 If necessary If necessary If necessary If necessary Task 2: 1. Provide the management a Cash Budget (by quarters and full year) for the year ending 31 December 2022