Please Check I am coming up with the wrong answers.
Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual Forecast Additional Information November $520,000 January $600,000 April forecast $500,000 December 540,000 February 640,000 March 510,000 Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 50 percent are paid in the month after sale and 50 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 30 percent of sales and is paid for in the month of sales. Selling and administrative expense is 20 percent of sales and is paid in the month of sales. Overhead expense is $36,000 in cash per month. Depreciation expense is $11,600 per month. Taxes of $9,600 will be paid in January, and dividends of $10,000 will be paid in March. Cash at the beginning of January is $112,000, and the minimum desired cash balance is $107,000. a. Prepare a schedule of monthly cash receipts for January, February, and March. March Sales Credit sales Cash sales Harry's Carryout Stores Cash Receipts Schedule November December January $ 520,000 $ 540,000 $ 600,000 $ 260,000 270,000 300,000 300,000 135,000 130,000 $ 565,000 $ February 640,000 $ 320,000 320,000 150,000 135,000 605.000 $ 510,000 255,000 255,000 160,000 One month after sale Two months after sale Total cash receipts 150,000 565,000 b. Prepare a schedule of monthly cash payments for January, February, and March. Payments for purchases Labor expense Selling and administrative Overhead Taxes Dividends Total cash payments Harry's Carryout Stores Cash Payments Schedule January February $ 240,000 $ 256,000 $ 180,000 192,000 120.000 128,000 36,000 36,000 9,600 0 0 0 $ 585,600 $ 612,000 $ March 204,000 153,000 102.000 36,000 0 10,000 505,000 c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.) Total cash receipts Total cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly loan (or repayment) Ending cash balance Cumulative loan balance Harry's Carryout Stores Cash Budget January February $ 565,000 $ 605,000 $ 584,600 612,000 1,149.600 1,217,000 112,000 107.000 1,261,600 1,324,000 1,154,600 1,217,000 2,416,200 2,541,000 March 565,000 505,000 1,070,000 107.000 1,177,000 1,070,000 2,247,000
