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Read the requirements. Data table Requirement 1. Calculate the cash that Breathe Right expects to collect in May and in June 2021. Show calculations for
Read the requirements. Data table Requirement 1. Calculate the cash that Breathe Right expects to collect in May and in June 2021. Show calculations for each month. Start by showing the cash collections of sales revenue, then complete the schedule by entering in the service revenue collections and the total cash collections for each month the "Collection \%" column and enter a "0" in the appropriate May or June column.) More info Almost all of the sales revenues of the oxygen equipment are credit card sales; cash sales are negligible. The credit card company deposits 97% of the revenues recorded each day into Breathe Right's account overnight. For the servicing of home oxygen equipment, 65% of oxygen services billed each month is collected in the month of the service, and 35% is collected in the month following the service. Requirements 1. Calculate the cash that Breathe Right expects to collect in April, May and June 2021 from sales and service revenue. Show calculations for each month. 2. Breathe Right has budgeted expenditures for May of $11,500 and requires a minimum cash balance of $260 at the end of each month. It has a cash balance on May 1 of $200. a. Given your answer to requirement 1, will Breathe Right need to borrow cash to cover its payments for May and maintain a minimum cash balance of $260 at the end of May? b. Assume (independently for each situation) that (1) May total revenues might be 10% lower or that (2) total costs might be 5% higher. Under each of those two scenarios, show the total net cash for May and the amount Breathe Right would have to borrow to cover its cash payments for May and maintain a minimum cash balance of $260 at the end of May. (Again, assume a balance of $200 on May 1.) 3. Why do Breathe Right's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? Has preparing the cash budget been helpful? Explain briefly
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