• Other financial information as of October 31, 2023:Cash in checking account, $7,000.Petty cash, $300.Outstanding mortgage balance, $352,000.Accounts payable arising from invoices for supplies and utilities that are unpaid as ofOctober 31, 2023, and due in November 2023, $4,500.• No other unpaid bills existed on October 31, 2023.• The club purchased $25,000 worth of exercise equipment during the current fiscal year. Cashof $10,000 was paid on delivery, with the balance due on October 1. This amount had not beenpaid as of October 31, 2023. An additional $25,00 (cash) of equipment purchases is plannedfor the coming year.• The club began operations in 2022 in rental quarters. In October 2022, it purchased its currentproperty (land and building) for $600,000, paying $120,000 down and agreeing to pay$32,000 plus 9% interest annually on the unpaid loan balance each November 1, startingNovember 1, 2023.• Membership rose 3% in 2023. The club has experienced approximately this same annualgrowth rate since it opened and this rate is expected to continue in the future.• Membership fees increased by 15% in 2023. The board has tentative plans to increase thesefees by 10% in 2024.• Lesson and class fees have not been increased for 3 years. The board policy is to encourageclasses and lessons by keeping the fees low. The members have taken advantage of thispolicy, and the number of classes and lessons has increased significantly each year. The clubexpects the percentage growth experienced in 2023 to be repeated in 2024.• Miscellaneous revenues are expected to grow at the same rate as in 2023.• Operating expenses expected to increase:• Hourly wage rates and the manager's salary: 15%.• Towels and supplies, utilities, and miscellaneous expenses: 25%.Required:1. Prepare a cash budget for 2024 for the Triple-F Health Club. (Round your "Growth %" column answers to 2decimal places and your remaining answers to nearest whole dollar or percentage amount.) Triple-F Health Club (Family, Fitness, and Fun) is a not-for-profit, family-oriented health club. Theclub's board of directors is developing plans to acquire more equipment and expand clubfacilities. The board plans to purchase about $25,000 of new equipment each year and wants toestablish a fund to purchase the adjoining property in four or five years. The adjoining propertyhas a market value of about $300,000.The club manager, Jane Crowe, is concerned that the board has unrealistic goals in light of theclub's recent financial performance. She has sought the help of a club member with anaccounting background to assist her in preparing a report to the board supporting her concerns.The member reviewed the club's records, including this cash-basis income statement:TRIPLE-F HEALTH CLUBIncome Statement (Cash Basis)For Years Ended October 3120232022Cash revenues:$ 379,000239,2002,800$ 300,000184,0001,500$ 485,500Annual membership feesLesson and class feesMiscellaneousTotal cash revenues$ 621,000Cash expenses:Manager's salary and benefitsRegular employees' wages and benefitsLesson and class employees' wages and benefitsTowels and suppliesUtilities (heat and light)Mortgage interest$ 36,000190,000$ 40,000194,000199,00020,00026,00035,2004,000$ 483,000$ 138,000150,00015,50015,00037,8001,500Miscellaneous$ 445,800$ 39,700Total cash expendituresIncrease in cash

The answer has been mentioned below.

began operations in 2022 in rental quarters. In October 202 (land and building) for $600,0o0, paying $120,000 down an plus 9% interest annually on the unpaid loan balance each N er 1, 2023. ship rose 3% in 2023. The club has experienced approximate ate since it opened and this rate is expected to continue in th ship fees increased by 15% in 2023. The board has tentative 10% in 2024. and class fees have not been increased for 3 years. The boar and lessons by keeping the fees low. The members have take nd the number of classes and lessons has increased significa the percentage growth experienced in 2023 to be repeated heous revenues are expected to grow at the same rate as in g expenses expected to increase:

began operations in 2022 in rental quarters. In October 202 (land and building) for $600,0o0, paying $120,000 down an plus 9% interest annually on the unpaid loan balance each N er 1, 2023. ship rose 3% in 2023. The club has experienced approximate ate since it opened and this rate is expected to continue in th ship fees increased by 15% in 2023. The board has tentative 10% in 2024. and class fees have not been increased for 3 years. The boar and lessons by keeping the fees low. The members have take nd the number of classes and lessons has increased significa the percentage growth experienced in 2023 to be repeated heous revenues are expected to grow at the same rate as in g expenses expected to increase:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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