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QUESTION 34 Financial information for Strawberry's Place is as follows: Cash at 1/1/20X1 is $10,000. The firm desires to maintain a minimum balance of $10,000

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QUESTION 34 Financial information for Strawberry's Place is as follows: Cash at 1/1/20X1 is $10,000. The firm desires to maintain a minimum balance of $10,000 at the end of each month. Total monthly sales are as follows: December 20X0 $120,000 Jan uary 20X1 150,000 (est) February 20X1 160,000 (est) The sales are 40 percent cash and 60 percent credit card. Visa is the only acceptable credit card at Strawberry's, and assume the charges are converted to cash the day of the sale. The brokerage charge is 2 percent of the sale. Expected other income is $2,000 from interest to be received in February. In addition, injanuary, a range with a net book value of $300 is expected to be sold for cash, resulting in a $1,000 gain on the sale. Food and beverages are paid for the month following the sale and average 40 percent and 25 percent, respectively. Food sales are four times beverage sales. Total sales consist of only food and beverage sales. Labor is paid for the last day ofthe month and averages 35 percent of sales. Other expenses approximate $20,000 per month and are paid for in that month. In the month ofJanuary $30,000 is expected to be expended on new equipment. Funding for this expenditure in part comes from a long-term loan of $15,000 from the Delaware Bank and Trust. Total monthly sales are as follows: December 20X0 $120,000 January 20X1 150,000 (est.) February 20X1 160,000 (est.) The sales are 40 percent cash and 60 percent credit card. Visa is the only acceptable credit card at Strawberry's, and assume the charges are converted to cash the day ofthe sale. The brokerage charge is 2 percent of the sale. Expected other income is $2,000 from interest to be received in February. In addition, inJanuary, a range with a net book value of $300 is expected to be sold for cash, resulting in a $1,000 gain on the sale. Food and beverages are paid for the month following the sale and average 40 percent and 25 percent, respectively. Food sales are four times beverage sales. Total sales consist of only food and beverage sales. Labor is paid for the last day of the month and averages 35 percent of sales. Other expenses approximate $20,000 per month and are paid for in that month. In the month ofJanuary $30,000 is expected to be expended on new equipment. Funding for this expenditure in part comes from a long-term loan of $15,000 from the Delaware Bank and Trust. If the rm borrows working capital funds, it must do so on an incremental basis of $1,000. 1. Prepare the cash budgets forjanuary and February 20x1

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