Q3. Fill in the blanks of Table 1: Monthly Cash Outflows and Table 2: Monthly Cash Inflows. Then, ise the information to generate Table3: Pro-Forma Cash Flow Budget and answer the following questions (10 points in total) Table 1: AdBi Estimated Monthly Cash Omflows (Jan. Ape) Feb Item Sales Jan $8,000 Mar $7,000 Purchases ($) $1,500 $4,000 $5,000 $7,000 $4,000 $1,000 $1,000 $1,000 $1,000 Payment of Account Payable Payment of Overhead Total Cash Outflows Inventory Levels $5,000 Assumptions: 1. The inventory turnover rate is 12. 2. Insentory is equal to current month's purchases + previous month's purchases 3. Cost of goods sold -25% of sales 4. Account payable turnover ratio-6. Table 2: A.B. Estimated Cash Inflows (Jan-Apr. Feb Apr Item Sales Jan $8,000 Mar $7,000 Cash Sales (5) $1,750 $4,000 Account Receivable (1 month old) Account Receivable (3 month old) Total Cash Inflows $2,000 $2,000 $1,000 Assumptions: 1. Sales are 1/4 cash, and 3/4 credits. 2. Account Receivable ratio is 4. Table 3: Pro Forma Cash Flow Budget Item Initial Cash Balance Jan $1,000 Feb $1,000 Mar $1,000 Apr $1,000 Cash Inflow Total cash available Cash Outflow Net Cash Need Borrowings End Cash Balance $1,000 $1,000 $1,000 Cumulative (Hint: These three tables are consistent. You are able to get cast inflow from table 2 and cash outflow from table 3) I Based on the above Pro Formia Cash Flow Budget, answer the following two questions: (1) Does the business need to borrow money? If yes, how much money needs to be borrowed? (2) When does the money need to be borrowed? When will the loan be repaid? Q3. Fill in the blanks of Table 1: Monthly Cash Outflows and Table 2: Monthly Cash Inflows. Then, ise the information to generate Table3: Pro-Forma Cash Flow Budget and answer the following questions (10 points in total) Table 1: AdBi Estimated Monthly Cash Omflows (Jan. Ape) Feb Item Sales Jan $8,000 Mar $7,000 Purchases ($) $1,500 $4,000 $5,000 $7,000 $4,000 $1,000 $1,000 $1,000 $1,000 Payment of Account Payable Payment of Overhead Total Cash Outflows Inventory Levels $5,000 Assumptions: 1. The inventory turnover rate is 12. 2. Insentory is equal to current month's purchases + previous month's purchases 3. Cost of goods sold -25% of sales 4. Account payable turnover ratio-6. Table 2: A.B. Estimated Cash Inflows (Jan-Apr. Feb Apr Item Sales Jan $8,000 Mar $7,000 Cash Sales (5) $1,750 $4,000 Account Receivable (1 month old) Account Receivable (3 month old) Total Cash Inflows $2,000 $2,000 $1,000 Assumptions: 1. Sales are 1/4 cash, and 3/4 credits. 2. Account Receivable ratio is 4. Table 3: Pro Forma Cash Flow Budget Item Initial Cash Balance Jan $1,000 Feb $1,000 Mar $1,000 Apr $1,000 Cash Inflow Total cash available Cash Outflow Net Cash Need Borrowings End Cash Balance $1,000 $1,000 $1,000 Cumulative (Hint: These three tables are consistent. You are able to get cast inflow from table 2 and cash outflow from table 3) I Based on the above Pro Formia Cash Flow Budget, answer the following two questions: (1) Does the business need to borrow money? If yes, how much money needs to be borrowed? (2) When does the money need to be borrowed? When will the loan be repaid
