Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this, Mc Hewitt, the banker, will finance construction if the firm can present an acceptable three month financial plan for January through March. Following are actual and forecasted sales figures: Actual November December Forecast Additional Information $440,000 January $520,000 April forecast $570,000 460,000 February 560,000 March 580,000 of the firm's sales, 10 percent are for cash and the remaining 60 percent are on credit. Of credit sales, 30 percent are paid in the month after sale and 70 percent are paid in the second month after the sale. Materials cost 50 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 30 percent of sales and is paid in the month of sales. Selling and administrative expense is 4 percent of sales and is also paid in the month of sales, Overhead is 540.000 in cash per month, Amortization expense is $11.200 per month. Taxes of $8,000 will be paid in January and dividends of $8,000 will be paid in March. Cash at the beginning of January is $104,000 and the minimum desired cash balance is $99,000 o. Prepare a schedule of monthly cash receipts for January, February and March Jim Daniels Health Products Cash Rocents Schedule January $ 5 November $ Salos Credit sales Cash sale Collections in the month after credit toles Collections to months aftur credit sales $ Total cash recepti b. Prepare a schedule of monthly cash payments for January, February and March February $ March Hin Daniels Health Products Cash Payment Schedule January Payments for purchases $ Labour expense Selling and administrative expense Overhead Taxes Dividends Total cash paynents c. Prepare a schedule of monthly cash budget with borrowings and repayments for January February and March. (Do not leave any empty spaces; input a O wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.) Jin Daniels Health Products Cash Budget January 5 March February $ Total cash receipts Total cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly loan or repayment Cumulative loan balance c. Prepare a schedule of monthly cash budget with borrowings and repayments for January, February and March (Do not leave any empty spaces; input o O wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.) i Daniel Health Products Cash Budget January $ February Mardhi $ Total cash receipts Total cash payments Net cash flow Beginning cash balance cusative Vash balance Monthly loon on (repayment) Cumulative loan balance Ending cash Balance
