MoBerry, 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 440,000 December 460,000 January 520,000 February 560,000 March 580,000 April 570,000 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 Payments for Purchases 260,000 280,000 290,000 Labour Expense 156,000 168,000 174,000 Selling & Admin. Expense 20,800 22,400 23,200 Overhead 40,000 40,000 40,000 Taxes 8,000 Dividends 8,000 TOTAL Cash Payments 484,800 510,400 535,200 Other financial highlights: Gross Margins 50% of sales Labour expense 30% of sales Selling & Administrative expense 4% of sales Fixed overhead $40,000 Amortization $11,200 Income taxes to be paid in January $8,000 Dividends to be paid in March $8,000 Cash at the beginning of January $104,000 Minimum desired cash balance $99,000 REQUIRED: Use the templates provided for each response Prepare a schedule for the monthly cash receipts for January, February and March. 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 MoBerry 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 February March Total cash receipts Total cash payments NET Cash Flow Beginning cash balance Cumulative cash balance Monthly loan or (repayment) Cumulative loan balance ENDING cash balance