Preparation of a cash budget) Lewis Printing has projected its sales for the first 8 months of 2019 as follows: Lewis collects 30 percent of its sales in the month of the sale, 40 percent in the month following the sale, and the remaining 30 percent 2 months following the sale uring November and December of 2018, Lewis's sales were $240,000 and $175,000, respectively. Lewis purchases raw materials 2 months in advance of its sales. These purchases are equal to 60 percent of its final sales. The supplier is paid 1 month after delivery Thus, purchases for April sales are made in February and payment is made in March In addition, rent expense is $12,000 per month and other exponses total $15,000 a month Beginning in March, quarterly fax prepayments of $22,500 are made. The company's cash balance as of December 31, 2018, was $26,000; a minimum balance of $25,000 must be maintained at all times to satisfy the firm's bank line of credit agreement. Lewis has arranged with its bank for short-term credit at an interest rate of 18 percent per annum (1.5 percent per month) to be paid monthly, Borrowing to meet estimated monthly cash needs takes place at the end of the month, and interest is not paid until the end of the following month. Consequently, if the firm needed to borrow $50,000 during April, then it would pay $750 (-0,015 $50,000) in interest during May. Finally, Lewis follows a policy of repaying its outstanding short-term debt in any month in which its cash balance exceeds the minimum desired balance of $25,000 a. Prepare a cash budget for Lewis Printing covering the first 6 months of $22,500 Fill in the Collections for the month of January: (Round to the nearest dollar) Nov Dec Jan Feb Mar Apr May June Sales $240,000 $175,000 $120,000 $140,000 $150,000 $300,000 $295,000 $200,000 Collections Month of sale (30%) First month (40%) Second month (30%) Total Collections udget) Lewis Printing has projected its sales for the first 8 months of 2019 as follows: Data Table nt of its sales in the month of the sale, 40 percent in the month following the sale, and the remaining 30 percent 2 month December of 2018, Lewis's sales were $240,000 and $175,000, respectively. materials 2 months in advance of its sales. These purchases are equal to 60 percent of its final sales. The supplier is paid bril sales are made in February and payment is made in March. 1 Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) January February March $120,000 140.000 150,000 April May June $300,000 295,000 200,000 $200,000 200,000 July August Print Done (30%) dons $ wer in the edit fields and then click check Answer Check Clear All U GUID20,UUU. a. Lewis needs to know what its cash requirements will be for the next 6 months so that it can renegotiate the terms of its short-term credit agreement with its bank, necessary. To address this problem, prepare a 6-month cash budget. Also, recalculate the budget for a 120 percent variation in its monthly sales b. Lewis has a $40,000 note due at the end of June. Will the firm have sufficient cash to repay the loan? a. Prepare a cash budget for Lewis Printing covering the first 6 months of $22,500 Fill in the Collections for the month of January (Round to the nearest dollar) Nov Dec Jan Feb Apr May June Sales $240,000 $175,000 $120,000 $140,000 $150,000 $300,000 $295,000 $200,000 Collections: Month of sale (30%) First month (40%) Second month (30%) Total Collections Mar Enter your answer in the edit fields and then click Check Answer. 2