Integrative Case 13-65 (Algo) Prepare Cash Budget for Service Organization (LO 13-4, 5, 6, 7) The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $59,000 of new equipment each year and wants to begin a fund to purchase a $609,000 piece of property for club expansion The club manager is concerned about the club's capability to purchase equipment and expand its facilities. One club member has agreed to help prepare the following financial statements and help the manager ascertain whether the plans are realistic. Additional information follows the financial statements. CORTEZ BEACH YACHT CLUB Statement of Income (Cash Basis) For the Year Ended October 31 Year 9 Year 8 $ 800,000 $609,000 479,700 369,000 4,900 3,900 $ 1,284,600 $981,900 Cash revenues Annual membership fees Lesson and class fees Miscellaneous Total cash received Cash costs Manager's salary and benefits Regular employees' wages and benefits Lesson and class employees' wages and benefits Supplies Utilities (heat and light) Mortgage interest Miscellaneous Total cash costs Cash income $ 81,000 $ 81,000 389,000 389,000 399,000 309,000 33,800 32,800 45,800 31,800 54,600 53,000 4,90 3,900 $ 1,008, 100 $900,500 $ 276,500 $ 81,400 Prey 1 of 3 Next > Additional Information 1. Other financial information as of October 31, year 9 a. Cash in checking account, $18,500. b. Petty cash, $1,050. c. Outstanding mortgage balance, $828,000. d. Accounts payable for supplies and utilities unpaid as of October 31, year 9, and due in November, year 9. $5,900. 2. The club purchased $59,000 worth of sailing equipment during the current fiscal year (ending October 31, year 9). Cash of $29,000 was paid on delivery, with the balance due on October 1, which had not been paid as of October 31, year 9. 3. The club began operations in year 3 in rental quarters. In October, year 5, it purchased its current property (land and building) for $1,362,000, paying $258,000 down and agreeing to pay $69,000 plus 4 percent interest annually on the previously unpaid loan balance each November 1, starting November 1 year 6. 4. Membership rose 2 percent during year 9, approximately the same annual rate of increase the club has experienced since it opened and that is expected to continue in the future. 5. Membership fees were increased by 18 percent in year 9. The board has tentative plans to increase them by 7 percent in year 10. 6. Lesson and class fees have not been increased for three years. The number of classes and lessons has grown significantly each year, the percentage growth experienced in year 9 is expected to be repeated in year 10. 7. Miscellaneous revenues are expected to grow in year 10 (over year 9) at the same percentage as experienced in year 9 (over year 8) 8. Lesson and class employees' wages and benefits will increase to $609.150. The wages and benefits of regular employees and the manager will increase 18 percent. Equipment depreciation and supplies, utilities, and miscellaneous expenses are expected to increase 23 percent. Required: a. Construct a cash budget for year 10 for Cortez Beach Yacht Club. (Do not round intermediate calculations. Round final answers to the nearest whole dollar amounts.) CORTEZ BEACH YACHT CLUB Budgeted Statement of Income (Cash Basis) Prey 1 of 3 7 Next > Budgeted Statement of income (Cash Basis) For the Year 10 Cash revenue Total cash received $ 0 Cash costs Total cash expenses $ 0 Cash income S Additional Cash Flows Cash payments