Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual Forecast November December $480,000 January 500,000 February March $560,000 April forecast 600,000 620,000 Additional Information $610,000 Of the firm's sales, 40 percent are for cash and the remaining 60 percent are on credit. Of credit sales, 30 percent are paid in the month after sale and 70 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 50 percent of sales and is paid in the month of sales. Selling and administrative expense is 5 percent of sales and is also paid in the month of sales. Overhead is $39,000 in cash per month; amortization expense is $11,400 per month. Taxes of $9,300 will be paid in January and dividends of $2,500 will be paid in March. Cash at the beginning of January is $108,000 and the minimum desired cash balance is $103,000. a. Prepare a schedule of monthly cash receipts for January, February and March. Jim Daniels Health Products Cash Receipts Schedule November 480000 288000 December $ 500000 300000 January February March April 560000 600000 620000 610000 336000 360000 372000 366000 200000 224000 240000 248000 244000 86400 90000 100800 108000 111600 201600 210000 235200 252000 Sales Credit sales Cash sales Collections in the month after credit sales Collections two months after credit sales Total cash receipts 192000 $ 515600 550800 591200 b. Prepare a schedule of monthly cash payments for January, February and March. Jim Daniels Health Products Cash Payments Schedule January Payments for purchases Labour expense Selling and administrative expense Overhead Taxes Dividends February March 168000 280000 180000 300000 186000 310000 28000 30000 31000 39000 39000 39000 9300 2500 524300 549000 568500 c. Prepare a schedule of monthly cash budget with borrowings and repayments for January, February and March. (Do not leave any empty spaces; input a O wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.) Total cash payments Jim Daniels Health Products Cash Budget January 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 515600 A February March 550800 591200 A A Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual Forecast November December $480,000 January 500,000 February March $560,000 April forecast 600,000 620,000 Additional Information $610,000 Of the firm's sales, 40 percent are for cash and the remaining 60 percent are on credit. Of credit sales, 30 percent are paid in the month after sale and 70 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 50 percent of sales and is paid in the month of sales. Selling and administrative expense is 5 percent of sales and is also paid in the month of sales. Overhead is $39,000 in cash per month; amortization expense is $11,400 per month. Taxes of $9,300 will be paid in January and dividends of $2,500 will be paid in March. Cash at the beginning of January is $108,000 and the minimum desired cash balance is $103,000. a. Prepare a schedule of monthly cash receipts for January, February and March. Jim Daniels Health Products Cash Receipts Schedule November 480000 288000 December $ 500000 300000 January February March April 560000 600000 620000 610000 336000 360000 372000 366000 200000 224000 240000 248000 244000 86400 90000 100800 108000 111600 201600 210000 235200 252000 Sales Credit sales Cash sales Collections in the month after credit sales Collections two months after credit sales Total cash receipts 192000 $ 515600 550800 591200 b. Prepare a schedule of monthly cash payments for January, February and March. Jim Daniels Health Products Cash Payments Schedule January Payments for purchases Labour expense Selling and administrative expense Overhead Taxes Dividends February March 168000 280000 180000 300000 186000 310000 28000 30000 31000 39000 39000 39000 9300 2500 524300 549000 568500 c. Prepare a schedule of monthly cash budget with borrowings and repayments for January, February and March. (Do not leave any empty spaces; input a O wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.) Total cash payments Jim Daniels Health Products Cash Budget January 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 515600 A February March 550800 591200 A A