KoolKiwi, a local fruit retailer is experiencing very strong sales growth across its 3-store network, and management has decided to add a 4th location. The company currently has no debt, but management realizes that due to seasonal cash flow fluctuations, the set-up of a new store will require a short-term bank loan until the store is fully operation. The finance manager, Jonah, compiled the following financial information for the next 3 months to show its bank manager. Sales Forecast: Actual Sales Forecast Sales November 220,000 December 240,000 January 300,000 February 340,000 March 360,000 April 350,000 Cash collection: 30% are for cash and the remaining 70% are on credit Of the credit sales, 25% of customers pay in the month after the sale 75% are paid in the second month after the sale Cash payments Forecast: January February March Payments for Purchases 120,000 136,000 144,000 Labour Expense 90,000 102,00 108,000 12,000 13,600 14,400 Selling & Adi Expense Overhead 28,500 28,500 28,500 Taxes 8,100 Dividends 2,500 TOTAL Cash Payments 258,600 280,100 297,400 Cash Receipts Forecast: January February March Sales 300,000 340,000 360,000 Credit Sales 210,000 238,000 252,000 Cash Sales 90,000 102,000 108,000 Collection in the month after credit sales 42,000 52,500 59,500 Collection 2 months after credit sales 115,500 126,000 157,500 TOTAL cash receipts 247,500 280,500 325,000 Other financial highlights: Gross Margins 60% of sales Labour expense 30% of sales Selling & Administrative expense 4% of sales Fixed overhead $28,500 Amortization $10,100 Income taxes - to be paid in January $8,100 Dividends - to be paid in March $2,500 Cash at the beginning of January $82,000 Minimum desired cash balance $77,000 REQUIRED: Use the template provided for your response a. Prepare a schedule of monthly cash budget with borrowings and repayments for January, February and March. QUESTION: What is the maximum draw down in the credit facility that KoolKiwi would have to make based on the forecasts? When will the loan facility be fully paid down