Part A Spicer Corporation would like to prepare a cash budget in order to determine the company's nancing needs for the upcoming year. The beginning cash balance is $161.250. Input values Company name Spicer Corporation The sales forthe upcoming year is as follows: Year end December 31. 20XX Spicer Corporation Spicer Corporation Sales Budget for the Year Ending December 31, ZOXX Sales Budget forthe Year Ending December 31. 20XX First Quarter Second Quarter Third Quarter Fourth Quarter 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Projected number of units to be sold 1.525 1.675 1.775 1.550 Projected number of units to be sold 1.525 1.675 1.775 1.550 Sales price per unit $ 275 $ 275 $ 275 275 Sales price per unit $ 275 $ 275 $ 275 $ 275 Projected revenue $ 419.375 $ 460.625 $ 480.125 426.250 Projected revenue $ 419.375 $460.625 $ 438.125 $ 426.250 All sales are on account. It is reported that 65% of the accounts receivable is collected in the quarter of the sale and Spicer Corporation 35% in the quarter after the sale The beginning accounts receivable is $142000 Operating Expenses for the Year Ending December 31. 20XX All the purchases are made on account The company pays 100 percent of the accounts payable each quarter The 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr purchases are related to the inventory needed to sell each month. On an average. the inventory costs $195 per unit Salaries and wages $ 55.625 $ 55.450 $ 54.675 $ 56.255 to produce. It is estimated that enough inventory is purchased each quarterto coverthe projected quarterly sales only. Advertising 1.200 1.500 900 2.000 The beginning accounts payable is $0 Utilities 2.700 2.700 2.700 2.700 Rent 6.000 6.000 6.000 6.000 Additional quarterly expenses include the following Total $ 65.525 $ 65.650 $ 64.275 $ 66.905 Spicer Corporation Operating Expenses for the Year Ending December 31, 20XX First Quarter Second Quarter Third Quarter Fourth Quarter Salaries and wages $ 55.625 $ 55.450 $ 54.675 33 56.285 Advertising 1.200 1.500 900 2.000 Utilities 2.700 2.700 2.700 2.700 Rent 8.000 8.000 8.000 8.000 Total 85.525 85.850 84.275 88.985 Beginning cash balance $161.25!) Beginning accounts receivable balance $142.00!) % of accounts receivables collected in the 65% quarter of the sale % of accounts receivables collected in the 35% quarter after the sale Inventory cost per unit $195 Note payable $165.000 Annual interest rate on note payable 6% 0n the balance sheet. Spicer Corporation reports a note payable of $165.000 The principal plus interest is due on Cost of new machine $50000 April 30. Until then. interest payments are made each month. The note has an annual interest rate of 8%. Minimum cash balance $50000 Line of credit borrowingsirepayment $10.000 It is projected that in October of the current year. Spicer Corporation will need to purchase a new machine in order to Minimum surplus for repayment of line of credit $5.000 replace an outdated machine. The new machine will cost $50000. The purchase is expected to be made with cash. Annual interest rate on line of credit 4% Amount of line of credit (in millions of dollars) $1 Spicer Corporation currently has a line of credit of $1 million that can be used to cover any deciencies The line of credit Month in which new machine is purchased October has a 4% annual interest rate. Interest payments must be made at the end of the quarter when there is a balance Interest due date 30Apr outstanding Borrowings must be made in increments of $10000 It is a standard practice that the line of credit is paid when there is a surplus of the minimum cash balance in increments of $5.000. Part A: Complete the following. Assume that the management wants to maintain a minimum cash balance of $50.000 Prepare a cash budget for Spicer Corporation for the upcoming year. including a cash receipts schedule. Spicer Corporation Cash Budget for the Year Ending December 31, 20XX Jan-Mar Apr-June Jul-Sept Oct-Dec First Quarter Second Quarter Third Quarter Fourth Quarter Spicer Corporation Budgeted Accounts Receivables and Cash Collections From Customers for the Year Ending December 31, 20XX - First Quarter Second Quarter Third Quarter Fourth Quarter