The owners of Exotic Imports, Inc. were worried about the cash position of the company after the first three months of operations. They believed that cash flows would be favorable after June. The company planned to borrow any amount needed to carry it through the first quarter as soon as a minimum cash balance of $10,000 is reached. A line of credit was arranged at the bank. The budget was based on the following assumptions: Sales for the first six months are expected to be as follows: April May June $40,000 July $60,000 August $120,000 September $200,000 $250,000 $100,000 The gross margin on sales was expected to be 60%. The company planned to carry an inventory equal to expected sales for the next month. Purchases were to be paid in the following month. Variable selling expenses were expected to equal 20% of sales. Fixed selling and administrative expenses were expected to be $30,000 per month, including $1,000 of depreciation. All of the payments for the variable selling and fixed selling and administrative expenses expenses were to be paid in the month of expense. All of the sales were expected to be credit sales with 70% collected in the month of sale and 30% in the following month. After reviewing the results of the budgets for April, May and June that are given in the MMg TP2 215 spreadsheet, the owners are still uncertain about the liquidity position of the company. They have asked you to continue the budget for the month of July. You are asked to ignore interest expense in your calculations. REQUIRED: Download the spreadsheet for MMg TP2 21S. Fill in the cells highlighted in yellow. 1. Enter the names of all group members in the cells at the top of each page. 2. Prepare a profit plan for July. 3. Prepare a cash budget for July. 4. Prepare a projected statement of financial position at July 31, 20X0. 5. Compute the break-even point in sales dollars for each month, for both accrual and cash-basis accounting 6. Does it appear that by July the liquidity problem will be solved and that the firm will be profitable? The owners of Exotic Imports, Inc. were worried about the cash position of the company after the first three months of operations. They believed that cash flows would be favorable after June. The company planned to borrow any amount needed to carry it through the first quarter as soon as a minimum cash balance of $10,000 is reached. A line of credit was arranged at the bank. The budget was based on the following assumptions: Sales for the first six months are expected to be as follows: April May June $40,000 July $60,000 August $120,000 September $200,000 $250,000 $100,000 The gross margin on sales was expected to be 60%. The company planned to carry an inventory equal to expected sales for the next month. Purchases were to be paid in the following month. Variable selling expenses were expected to equal 20% of sales. Fixed selling and administrative expenses were expected to be $30,000 per month, including $1,000 of depreciation. All of the payments for the variable selling and fixed selling and administrative expenses expenses were to be paid in the month of expense. All of the sales were expected to be credit sales with 70% collected in the month of sale and 30% in the following month. After reviewing the results of the budgets for April, May and June that are given in the MMg TP2 215 spreadsheet, the owners are still uncertain about the liquidity position of the company. They have asked you to continue the budget for the month of July. You are asked to ignore interest expense in your calculations. REQUIRED: Download the spreadsheet for MMg TP2 21S. Fill in the cells highlighted in yellow. 1. Enter the names of all group members in the cells at the top of each page. 2. Prepare a profit plan for July. 3. Prepare a cash budget for July. 4. Prepare a projected statement of financial position at July 31, 20X0. 5. Compute the break-even point in sales dollars for each month, for both accrual and cash-basis accounting 6. Does it appear that by July the liquidity problem will be solved and that the firm will be profitable