Question 1:- Cash Budget: Your friend, Susy Snipps, has been running a successful hair salon for the last couple of years. She has asked you to put together a cash budget. Her regular accountant was too busy to help but told Susy het depreciation expense was going to be $9,000 per year, using the straight-line method. She has supplied you with the following information to help you put together her cash budget. The following are the estimated number and type of haircuts she will do per month May June July August September Regular Cut 35 40 55 45 Perms 20 5 10 Cut and Dye 50 90 60 110 10 50 The revenue for a regular cut is $45/cut. Perms are $200/perm and a cut and dye brings in $325 each Susy has a deal with a movie production company and half of the "cut and dve jobs that she does are on account, the other half pay on the date of the service. The movie production company pays for the "cut and dye" the month after it is done. Perms and Regular cuts all pay right away. Material and Labour information Susy has provided: Regular cut Perms 3 Cut and Dye 4 0.5 Labour hours Chemical Packs needed Cost of Chemical Pack $ 25 $ 30 Perms and "cut and dye" jobs require some chemical packs to complete the job (see amounts above) as well as the estimated time it takes (labour hours, paid at $30/hour) to complete the job. The chemical packs for perms can be purchased the day of the job, so there is no beginning or ending Inventory. "Cut and dye" jobs, however, require a different chemical pack and Susy made the decision to have additional inventory on hand. She requires 20% of next months total "cut and dye" to be factored into the total chemical packs needed for "cut and dye" jobs. The beginning inventory, May 1, was zero. Perm packs are paid 100% in the month they are used. "Cut and Dye packs are purchased on account and are paid the month after the service has been completed. Other information Susy has provided: Rent Dividend Office and Admin June 1.500 3,000 3,500 July 1,500 5,000 3,500 August 1,500 7,000 3,500 September 1,500 15,000 3,500 NOTE: Susy requires a minimum bank balance of $4,000 at the end of the month and the ending May bank balance is $5,000. Susy has access to a line of credit of $500,000 at an interest rate of 20% Borrowings are made at the beginning of the month and repayments are made at the end of the month