LESS. USE or youus sou Gross profit Less: Operating expenses Net income Requirement 5. Prepare the cash collections budget for November and December. Review the sales budget prepared in Requirement 1. Dollar Saver Cash Collections Budget For the Months of November and December November December Cash sales Credit sales, net of fees Total cash collections Requirement 6. Prepare the cash payments budget for November and December. (If no cash payment is made, make sure to enter "0" in the appropriate cell.) Review the budgets prepared in Requirements 1, 2, and 3. Dollar Saver Cash Payments for Operating Expenses Budget For the Months of November and December November December Purchases of inventory, 30 day lag Cash payments for wages Cash payments for utilities Cash payments for wages Cash payments for utilities Cash payments for property taxes Cash payments for dividends Property and liability insurance Total payments for operating expenses Requirement 7. Prepare the combined cash budget for November and December. (Enter a "0" for any zero amounts. Use parentheses or a minus sign for negative cash balances and financing payments.) Review the cash collections and cash payments budgets prepared in Requirements 5 and 6. Dollar Saver Combined Cash Budget For the Months of November and December November December Beginning cash balance Plus: Cash collections Total cash available Less: Cash payments Ending cash balance before financing Financing Plus: New borrowings Less: Debt repayments Less: Interest payments Ending cash balance Data Table - X . . October sales are projected to be $300,000. Sales are projected to increase by 15% in November and another 30% in December and then return to the October level in January. 20% of sales are made in cash while the remaining 80% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 1% transaction fee, and deposit the net amount (sales price less the transaction fee) in the store's bank account daily. The store does not accept checks. Because of the payment mechanisms, there is no risk of non-payment or bad-debts. The store's gross profit is 25% of its sales revenue. For the next several months, the store wants to maintain an ending merchandise inventory equal to $16,000 plus 20% of the next month's cost of goods sold. All purchases for merchandise are made on account and paid in the month following the purchase. The September 30 inventory is expected to be $61,000. Expected monthly operating expenses and details about payments include the following: Wages of store workers should be $7,000 per month and are paid on the last day of each month. Utilities expense is expected to be $900 per month in September, October, and November Utilities expense is expected to be $1,400 per month during the colder months of December, January, and February All utility bills are paid the month after incurred. Property tax is $18,000 per year and is paid semiannually each December and June. Property and liability insurance is $16,800 per year and is paid semiannually each January and July Depreciation expense is $180,000 per year, the straight-line method used. Transaction fees, as stated earlier, are 1% of credit and debit card sales. Cash dividends of $210,000 are to be paid in December. Assume the cash balance on October 31 is $55,000. The company wants to maintain a cash balance of at least $55,000 at the end of every month. The company has arranged a line of credit with a local bank at a 8% interest rate. . Print Done LESS. USE or youus sou Gross profit Less: Operating expenses Net income Requirement 5. Prepare the cash collections budget for November and December. Review the sales budget prepared in Requirement 1. Dollar Saver Cash Collections Budget For the Months of November and December November December Cash sales Credit sales, net of fees Total cash collections Requirement 6. Prepare the cash payments budget for November and December. (If no cash payment is made, make sure to enter "0" in the appropriate cell.) Review the budgets prepared in Requirements 1, 2, and 3. Dollar Saver Cash Payments for Operating Expenses Budget For the Months of November and December November December Purchases of inventory, 30 day lag Cash payments for wages Cash payments for utilities Cash payments for wages Cash payments for utilities Cash payments for property taxes Cash payments for dividends Property and liability insurance Total payments for operating expenses Requirement 7. Prepare the combined cash budget for November and December. (Enter a "0" for any zero amounts. Use parentheses or a minus sign for negative cash balances and financing payments.) Review the cash collections and cash payments budgets prepared in Requirements 5 and 6. Dollar Saver Combined Cash Budget For the Months of November and December November December Beginning cash balance Plus: Cash collections Total cash available Less: Cash payments Ending cash balance before financing Financing Plus: New borrowings Less: Debt repayments Less: Interest payments Ending cash balance Data Table - X . . October sales are projected to be $300,000. Sales are projected to increase by 15% in November and another 30% in December and then return to the October level in January. 20% of sales are made in cash while the remaining 80% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 1% transaction fee, and deposit the net amount (sales price less the transaction fee) in the store's bank account daily. The store does not accept checks. Because of the payment mechanisms, there is no risk of non-payment or bad-debts. The store's gross profit is 25% of its sales revenue. For the next several months, the store wants to maintain an ending merchandise inventory equal to $16,000 plus 20% of the next month's cost of goods sold. All purchases for merchandise are made on account and paid in the month following the purchase. The September 30 inventory is expected to be $61,000. Expected monthly operating expenses and details about payments include the following: Wages of store workers should be $7,000 per month and are paid on the last day of each month. Utilities expense is expected to be $900 per month in September, October, and November Utilities expense is expected to be $1,400 per month during the colder months of December, January, and February All utility bills are paid the month after incurred. Property tax is $18,000 per year and is paid semiannually each December and June. Property and liability insurance is $16,800 per year and is paid semiannually each January and July Depreciation expense is $180,000 per year, the straight-line method used. Transaction fees, as stated earlier, are 1% of credit and debit card sales. Cash dividends of $210,000 are to be paid in December. Assume the cash balance on October 31 is $55,000. The company wants to maintain a cash balance of at least $55,000 at the end of every month. The company has arranged a line of credit with a local bank at a 8% interest rate. . Print Done