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Kelly's Boutique is contemplating several means of nancing their acquisition of $200,000 in special equipment. Dne alternative is to borrow $200,000 from a local bank

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Kelly's Boutique is contemplating several means of nancing their acquisition of $200,000 in special equipment. Dne alternative is to borrow $200,000 from a local bank for 10 years at 12 percent per annum. The bank has asked them to produce a 1-year cash budget broken down by months [January through December}. Sales of $530,000 are expected in the rst month, with each month thereafter increasing 2 percent. Purchases are based on an expected cost of sales of 55 percent and a required ending inventory of T0 percent of next month's cost of sales. Beginning inventory was $11,000. 5ales forjanuary next year are expected to be $50,000. Sales in the previous November and December were $25,000 and $25,000, respectively. Expenses include advertising expense of $500, depreciation expense of $500, interest expense of $1,000, payroll expense of $5,000, supplies expense of $500, and utilities expense of $500 per month throughout the year. All expenses except depreciation are paid in the month during which they are incurred. Collections in the month of sale are expected to be 50 percent, collections in the rst month following a sale 50 percent, and in the second month 10 percent. Payments in the month of purchase are expected to be 25 percent, payments in the rst month following a purchase 15 percent, and payments in the second month to be 10 percent. Purchases in the previous November and December were $15,000 and $12,000, respectively. Proceeds from the $200,000 loan are expected injune, and $200,000 of equipment will be purchased in July. Monthly payments of $1500 on the loan also begin injuly. The beginning cash balance in January was $15,000. Using the ch5-0$ le to start your work, create a cash budget {as you did in the chapter} that is based on the assumptions listed in the previous paragraph. L'se Excel's grouping feature to group operating cash receipts, operating cash payment, cash from {to} operating activities, cash from {to} investing activities, and cash from {to} nancing activities and also to group the twelve monthly columns together. Save your le as ch5- 0e_student_name {replacing student_name with your name}

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