THERE IS A TEMPLATE FOR THE SOLUTION TO THIS PROBLEM

The following information pertains to the operating budget forOpaLockaStuff Corporation.

Sales for August were $175,000

Sales for September were $185,000

Budgeted sales for October is $182,000 and for November is $226,000.

Cash sales are 10% of total sales

Collections for sales on account are 50% in the month of sale, 40% the next month, 8% in the third month.

Gross margin is 40% of sales.

Purchases are paid 30% in the month of purchase and 70% in the next month. Merchandise is bought and sold in the same month. There is no beginning or ending inventory.

Operating, general & administrative costs are $62,000 each month, $4,000 of which is depreciation expense.

Adownpaymenton new equipment for January delivery is due on October 5thin the amount of $14,000.

OpaLockapolicy is to end each month with $20,000 cash on hand.

Beginning cash balance on October 1 is $20,000.

The outstanding loan balance on October 1 is $30,000.

What are . ..

Collections from sales forOctober _____________November _____________

Disbursements for purchasesOctober _____________November _____________

Cash balance at the end of (before borrowing/repaying)October _____________November _____________

Loan balance at the end ofOctober _____________November _____________

Operating income forOctober _____________November _____________

Cash flow forOctober _____________November _____________

Uncollected balance from sales at the end ofNovember _____________

Unpaid balance from purchases at the end ofNovember _____________

Opa Locka Beach Towels Sales/Collections August sales September sales October sales November sales August September October November Cash On Account Cash On Account Cash On Account Cash On Account Monthly Cash Collections TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN TRY AGAIN Purchases/Disbursements September October November Monthly Cash Disbursements Cash Flow Beginning cash balance Cash balance EOM before loan borrowing or payment Required cash balance Available to pay down loan Beginning loan balance Loan borrowing/payment Ending loan balance Ending cash balance Cash flow for month Uncollected balance from sales TRY AGAIN Unpaid balance from purchases TRY AGAIN Operating Income Operating income TRY AGAIN TRY AGAIN December January