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Problem 14-14 (similar to) Question Help (Preparation of a cash budget) Lewis Printing has projected its sales for the first 8 months of 2019 as follows: Lewis collects 20 percent of its sales in the month of the sale, 50 percent in the month following the sale, and the remaining 30 percent 2 months following the sale. During November and December of 2018, Lewis's sales were $200,000 and $165,000, respectively Lewis purchases raw materials 2 months in advance of its sales. These purchases are equal to 65 percent of its final sales. The supplier is paid 1 month after delivery Thus, purchases for April sales are made in February and payment is made in March In addition, rent expense is $10,000 per month and other expenses total $15,000 a month. Beginning in March, quarterly tax prepayments of $21.500 are made. The company's cash balance as of December 31, 2018, was $30,000; a minimum balance of $20,000 must be maintained at all times to satisfy the firm's bank line of credit agreement. Lewis has arranged with its bank for short-term credit at an interest rate of 15 percent per annum (1.25 percent per month) to be paid monthly. Borrowing to meet estimated monthly cash needs takes place at the end of the month, and interest is not paid until the end of the following month. Consequently, if the firm needed to borrow $50,000 during April, then it would pay $625 ( = 0.0125 x $50,000) in interest during May. Finally, Lewis follows a policy of repaying its outstanding short-term debt in any month in which its cash balance exceeds the minimum desired balance of $20,000 a. Prepare a cash budget for Lewis Printing covering the first 6 months of $21.500. Fill in the Collections for the month of January: (Round to the nearest dollar.) Nov Dec Jan Feb Mar Apr May June $200,000 $165,000 $120,000 $140,000 $130,000 $320,000 $275,000 $200,000 24,000 Sales Collections Month of sale (20%) First month (50%) Second month (30%) Total Collections Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) This question has not been complete January February March $120,000 140,000 130,000 14 parts April May June $320,000 275.000 200.000 July August $220,000 200,000 remaining Problem 14-14 (similar to) Question Help TURIU GI OLI VIAM TU, LOW IG LUWU IV, capovovery Lewis purchases raw materials 2 months in advance of its sales. These purchases are equal to 65 percent of its final sales. The supplier is paid 1 month after delivery. Thus, purchases for April sales are made in February and payment is made in March In addition, rent expense is $10,000 per month and other expenses total $15,000 a month. Beginning in March, quarterly tax prepayments of $21,500 are made. The company's cash balance as of December 31, 2018, was $30,000; a minimum balance of $20,000 must be maintained at all times to satisfy the firm's bank line of credit agreement. Lewis has arranged with its bank for short-term credit at an interest rate of 15 percent per annum (1.25 percent per month) to be paid monthly, Borrowing to meet estimated monthly cash needs takes place at the end of the month, and interest is not paid until the end of the following month. Consequently, if the firm needed to borrow $50,000 during April, then it would pay $625 ( = 0.0125 x $50,000) in interest during May. Finally, Lewis follows a policy of repaying its outstanding short-term debt in any month in which is cash balance exceeds the minimum desired balance of $20,000 a. Lewis needs to know what its cash requirements will be for the next 6 months so that it can renegotiate the terms of its short-term credit agreement with its bank, if necessary. To address this problem, prepare a 6-month cash budget. Also, recalculate the budget for a 120 percent variation in its monthly sales b. Lewis has a $40,000 note due at the end of June. Will the firm have sufficient cash to repay the loan? Total Collections $166,500 $137,500 132,000 S 171,000 254,000 S 273,500 Fill in the Disbursements for the month of January: (Round to the nearest dollar) Apr May June Cash Disbursements: Purchases Rent Nov Dec Jan Feb Mar Data Table Other Expenses Tax Deposits Interest on short-term loan (Click on the following loon in order to copy its contents into a spreadsheet.) This question has not been completed, 14 parte January February March $120,000 140,000 130,000 April May June $320,000 275,000 200,000 July August $220,000 200,000 remaining