The president feels very strongly that Mountain Sports should expand operations to a second location. She has even found a prime location in Canmore, Alberta, One of the great things about Canmore is its proximity to the mountains, and its only about 10 minutes away from this beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. Mountain Sports has aquired an open line of credit up to a maximum of $350,000. It will be necessary to convince the bank manager of this new Canmore branch ability to repay its line of credit including any interest. Management has provided the following list of assumptions to help in the preparation of the cash budget (note: you will need to use the projected income statement provided in Question 4 to complete the cash budget): \begin{tabular}{l|lr|} \hline 1. Beginning cash balance invested by owners & $56,000 \\ \hline \end{tabular} 3. Tvoe of collections from customers: Cash sales are collected in the quarter of the sale, all credit sales are collected in the quarter after the sale. 4. Merchandise purchases Merchandise purchases (cost of goods sold) are all paid in the quarter following purchase. (Quarter 1 purchases are bought in Quarter 1 but paid for in quarter 2 ). 5. Operating expenses All other operating expenses (all expenses except cost of goods s 9. Borrowing and Repayments: Any borrowing will take place on the first day of the quarter and any repayments are paid at the end of the quarter. All borrowing and payments are made in increments of $1,000. Interest on borrowing can be ignored. equined: Prepare a cash budget for the first year of operation in Canmore by quarter and in to tal. Show clearly on your Notefrom instructort Total sales amount teken from question 4. Remember to refer to question 4 as this cash budzet is a continuation of the Canmare expansion introduced in Question 4 . This will be inportant for the cash disbursements as welli The president feels very strongly that Mountain Sports should expand operations to a second location. She has even found a prime location in Canmore, Alberta, One of the great things about Canmore is its proximity to the mountains, and its only about 10 minutes away from this beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. Mountain Sports has aquired an open line of credit up to a maximum of $350,000. It will be necessary to convince the bank manager of this new Canmore branch ability to repay its line of credit including any interest. Management has provided the following list of assumptions to help in the preparation of the cash budget (note: you will need to use the projected income statement provided in Question 4 to complete the cash budget): \begin{tabular}{l|lr|} \hline 1. Beginning cash balance invested by owners & $56,000 \\ \hline \end{tabular} 3. Tvoe of collections from customers: Cash sales are collected in the quarter of the sale, all credit sales are collected in the quarter after the sale. 4. Merchandise purchases Merchandise purchases (cost of goods sold) are all paid in the quarter following purchase. (Quarter 1 purchases are bought in Quarter 1 but paid for in quarter 2 ). 5. Operating expenses All other operating expenses (all expenses except cost of goods s 9. Borrowing and Repayments: Any borrowing will take place on the first day of the quarter and any repayments are paid at the end of the quarter. All borrowing and payments are made in increments of $1,000. Interest on borrowing can be ignored. equined: Prepare a cash budget for the first year of operation in Canmore by quarter and in to tal. Show clearly on your Notefrom instructort Total sales amount teken from question 4. Remember to refer to question 4 as this cash budzet is a continuation of the Canmare expansion introduced in Question 4 . This will be inportant for the cash disbursements as welli
