Required information Problem 13-68 \& Problem 13-69 (Algo) (LO 13-4, 5, 6, 8) [The following information applies to the questions displayed below] Owen Surf Sports is an idea of two budding entrepreneurs. Their plan is to sell kiteboards from a store in the local town. Between them, they invest $37,000 in capital and are in the process of applying for a bank loan, also for $37,000. The loan would be repaid in four years. The owners will also pay the bank annual interest at a rate of 6 percent. The owners are working on a business plan that the bank has requested. The store would sell only two models of kites Initially, the X1 and the X2. Data on the kites are given as follows: Additional information on the planned operations for the year includes the following: 1. Equipment costing $51,500 will be purchased for cash when the store opens. The equipment will be depreciated over five years using straight-line depreciation. 2. The owners expect sales to occur uniformly over the year. Sales will be both for cash ( 60 percent) and on account ( 40 percent). Sales on account are assumed to be collected in two months. 3. The owners will maintain inventory equal to one-half of a month's sales. All kites will be purchased from the manufacturer on credit with payment made one month after purchase. 4. Annual cash selling. general, and administrative expenses are $48,500 fixed plus 10 percent of revenues. 5. The applicable income tax rate is 20 percent. Problem 13-68 (Algo) Budgeted Financial Statements in a Retail Firm (LO 13-5, 6) Required: a. Prepare a budgeted income statement for the year based on the data and assumptions available. b. Prepore the year-end (December 31) budgeted balance sheet based on the data and assumptions available. Complete this question by entering your answers in the tabs below. Prepare a budgeted income statement for the year based on the data and assumptions available. Prepare the year-end (December 31 ) budgeted balance sheet based on the data and assumptions available. Note: Do not round intermediate calculations. Round vnur final anewere to the nearest whole dollar. Required information Problem 13-68 \& Problem 13-69 (Algo) (LO 13-4, 5, 6, 8) [The following information applies to the questions displayed below] Owen Surf Sports is an idea of two budding entrepreneurs. Their plan is to sell kiteboards from a store in the local town. Between them, they invest $37,000 in capital and are in the process of applying for a bank loan, also for $37,000. The loan would be repaid in four years. The owners will also pay the bank annual interest at a rate of 6 percent. The owners are working on a business plan that the bank has requested. The store would sell only two models of kites initially, the X1 and the X2. Data on the kites are given as follows: Additional information on the planned operations for the year includes the following: 1. Equipment costing $51,500 will be purchased for cash when the store opens. The equipment will be depreciated over five years using straight-line depreciation. 2. The owners expect sales to occur uniformiy over the year. Sales will be both for cash ( 60 percent) and on account ( 40 percent). Sales on account are assumed to be collected in two months. 3. The owners will maintain inventory equal to one-half of a month's sales. All kites will be purchased from the manufacturer on credit with payment made one month after purchase. 4. Annual cash selling, general, and administrative expenses are $48,500 fixed plus 10 percent of revenues. 5. The applicable income tax rate is 20 percent. Problem 13-69 (Algo) Cash Budgets and Sensitivity Analysis in a Retail Firm (LO 13-4, 5, 6, 8) Required: a. Prepare a cash budget for the year. b. The owners want to ensure that they have cash on hand at the end of the year equal to the current accounts payable balance on December 31. Will the store meet that requirement? c. Consider only the assumption about the percentage of sales that will be made on account (currently 40 percent). What assumption about this percentage would exactly achieve the goal set by the owners in requirement (b) ? Complete this question by entering your answers in the tabs below. Prepare a cash budget for the year. Note: Round vour intermediate and final ancware in naaract whola dallar. a. Prepare a cash budget for the year. b. The owners want to ensure that they have cash on hand at the end of the year equal to the current accounts payable balance on December 31. Will the store meet that requirement? c. Consider only the assumption about the percentage of sales that will be made on account (currently 40 percent). What assumption about this percentage would exactly achieve the goal set by the owners in requirement (b) ? Complete this question by entering your answers in the tabs below. The owners want to ensure that they have cash on hand at the end of the year equal to the current accounts payable balance on December 31 , Will the store meet that requirement? a. Prepare a cash budget for the year. b. The owners want to ensure that they have cash on hand at the end of the year equal to the current accounts payable balance on December 31. Wil the store meet that requirement? c. Consider only the assumption about the percentage of sales that will be made on account (currently 40 percent). What assumption about this percentage would exactly achieve the goal set by the owners in requirement (b) ? Complete this question by entering your answers in the tabs below. Consider only the assumption about the percentage of sales that will be made on account (currently 40 percent). What assumption about this percentage would exactly achieve the goal set by the owners in requirement (b) ? Note: Do not round intermediate calculations. Round your answer to 1 decimal place