Printing makes custom t-shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information:

1. Sales are budgeted at $20,000 for Month 1, $23,000 for Month 2, and $24,000 for Month 3.

2. Sales are collected 50% in the month of the sale, and 50% in the month following the sale.

3. Cost of Goods Sold is budgeted at 45% of Sales.

4. Inventory purchases are paid in full in the month following the purchase.

5. No inventory is kept on hand at the end of the month.

6. Monthly selling, general, and administrative expenses are as follows: donations are 10% of sales; advertising is 3% of sales; miscellaneous is 1% of sales; and rent is $4,000 per month. All SG&A expenses are paid in the month they are incurred.

7. Bobcat Printing is planning to purchase some equipment in Month 3 for $4,000 in cash.

8. They would like to maintain a minimum cash balance of $2,500 at the end of each mont The company has an agreement with a local bank that allows them to borrow, with a total line of credit of $20,000. The interest rate on these loans is 12% per year (or 1% per month). If able, theyll repay the loan on the last day of the month when it has enough cash to pay the full balance and maintain an adequate ending cash balance. Theyll only borrow up to the minimum cash balance.

1. Beginning cash is 0. The owner makes a draw of $2,500 every month. (Note: sole proprietors and partnerships take owners draws, while stockholders receive dividends). Based upon the information provided, complete the operating budgets provided in the excel template, and answer the questions in Connect. When making calculations always round up (for example: 33 7% = 2.31, round up to 3.00).

Check Figures (correct answers):
Gross Margin	$ 36,850.00
Total assets	$ 18,752.00
Ending Retained Earnings	$ 7,952.00

1. What is the total projected sales for the first quarter of operations?
2. How much cash does Bobcat Printing expect to collect in the first quarter of operations?
3. What are budgeted cash payments for inventory purchases in the first quarter of operations?
4. What is the total budgeted Cost of Goods Sold for the first quarter of operations?
5. What is the total budgeted SG&A expense for the quarter?
6. What is the projected beginning cash balance for Month 1?
7. What is the projected ending cash balance for Month 1 (bottom line - after any potential borrowing)?
8. What is the projected gross profit for the first quarter of operations?
9. What is the projected net income the first quarter of operations?
10. What is the projected beginning capital investment for the first quarter of operations?
11. What is the projected total owner's equity for the first quarter of operations?
12. What is the projected ending cash balance for the first quarter of operations?
13. What is the projected accounts receivables balance for the first quarter of operations?
14. What is the projected account payable for the first quarter of operations?
15. What is the projected net cash flow from operating activities for the first quarter of operations?
16. What is the projected net cash flow for investing activities for the first quarter of operations?
17. What is the projected cash flow from financing activities for the first quarter of operations?