LuluLime, 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 unta 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 320.000 December 340.000 400,000 January February 440,000 March 460.000 Apri 450,000 Cash collection: . 40% are for cash and the remaining 60% are on credit . Of the credit sales, 30% of customers pay in the month after the sale 70% are paid in the second month after the sale Cash payments Forecast: January February March 120,000 138,000 132,000 198,000 180,000 207,000 Payments for Purchases Labour Expense Selling & Admin. Expense Overhead Taxes 24,000 26,400 27,600 32,000 32,000 32,000 8,600 5,000 Dividends TOTAL Cash Payments 364,600 388,400 409,600 Other financial highlights: Gross Margins 70% of sales Labour expense 45% of sales Selling & Administrative expense 6% of sales Fixed overhead $32,000 Amortization $10,600 $8,600 Income taxes to be paid in January Dividends - to be paid in March $5,000 $92,000 Cash at the beginning of January Minimum desired cash balance $87,000 REQUIRED: Use the templates provided for each response a. Prepare a schedule for the monthly cash receipts for January, February and March. b. 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 Lululime would have to make based on the forecasts? When will the loan facility be fully paid down? EXAMPLES OF THE CASH RECEIPT SCHEDULE & MONTLY CASH BUDGET ARE PROVIDED, PLEASE USE THESE TEMPLATES TO SET UP YOUR ANSWERS: Cash Receipt Schedule - Fill in the forecast for March January February March Sales Credit Sales Cash Sales Collection in the month after credit sales Collection 2 months after credit sales TOTAL cash receipts Monthly Cash Budget - Fill in the forecast for March January Total cash receipts February March Total cash payments NET Cash Flow Beginning cash balance Cumulative cash balance Monthly loan or (repayment) Cumulative loan balance ENDING cash balance