Homework Help is Here – Start Your Trial Now!
Business
Finance
Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual November Forecast Additional Information $520,000 January 540,000 February $600,000 April forecast 640,000 510,000 $500, 000 December March Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 50 percent are paid in the month after sale and 50 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 30 percent of sales and is paid for in the month of sales. Selling and administrative expense is 20 percent of sales and is paid in the month of sales. Overhead expense is $36,000 in cash per month. Depreciation expense is $11,600 per month. Taxes of $9,600 will be paid in January, and dividends of $10,000 will be paid in March. Cash at the beginning of January is $112,000, and the minimum desired cash balance is $107,000. a. Prepare a schedule of monthly cash receipts for January, February, and March. Harry's Carryout Stores Cash Receipts Schedule November December January February March Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts 0 $ 0 $

Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual November Forecast Additional Information $520,000 January 540,000 February $600,000 April forecast 640,000 510,000 $500, 000 December March Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 50 percent are paid in the month after sale and 50 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 30 percent of sales and is paid for in the month of sales. Selling and administrative expense is 20 percent of sales and is paid in the month of sales. Overhead expense is $36,000 in cash per month. Depreciation expense is $11,600 per month. Taxes of $9,600 will be paid in January, and dividends of $10,000 will be paid in March. Cash at the beginning of January is $112,000, and the minimum desired cash balance is $107,000. a. Prepare a schedule of monthly cash receipts for January, February, and March. Harry's Carryout Stores Cash Receipts Schedule November December January February March Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts 0 $ 0 $

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter12: The Cost Of Capital
Section: Chapter Questions
Problem 15P
See similar textbooks
icon
Related questions
Question

hello, help please 

Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual Forecast Additional Information November $520,000 January 540,000 February March $600,000 April forecast 640,000 510,000 $500,000 December Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 50 percent are paid in the month after sale and 50 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 30 percent of sales and is paid for in the month of sales. Selling and administrative expense is 20 percent of sales and is paid in the month of sales. Overhead expense is $36,000 in cash per month. Depreciation expense is $11,600 per month. Taxes of $9,600 will be paid in January, and dividends of $10,000 will be paid in March. Cash at the beginning of January is $112,000, and the minimum desired cash balance is $107,000. a. Prepare a schedule of monthly cash receipts for January, February, and March. Harry's Carryout Stores Cash Receipts Schedule November December January February March Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts $ 0 $ 0 $ %24
Transcribed Image Text:Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual Forecast Additional Information November $520,000 January 540,000 February March $600,000 April forecast 640,000 510,000 $500,000 December Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 50 percent are paid in the month after sale and 50 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 30 percent of sales and is paid for in the month of sales. Selling and administrative expense is 20 percent of sales and is paid in the month of sales. Overhead expense is $36,000 in cash per month. Depreciation expense is $11,600 per month. Taxes of $9,600 will be paid in January, and dividends of $10,000 will be paid in March. Cash at the beginning of January is $112,000, and the minimum desired cash balance is $107,000. a. Prepare a schedule of monthly cash receipts for January, February, and March. Harry's Carryout Stores Cash Receipts Schedule November December January February March Sales Credit sales Cash sales One month after sale Two months after sale Total cash receipts $ 0 $ 0 $ %24
b. Prepare a schedule of monthly cash payments for January, February, and March. Harry's Carryout Stores Cash Payments Schedule January February March Payments for purchases Labor expense Selling and administrative Overhead Taxes Dividends Total cash payments 2$ 0 $ 0 $ c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.) Harry's Carryout Stores Cash Budget January February March Total cash receipts Total cash payments Net cash flow Beginning cash balance
Transcribed Image Text:b. Prepare a schedule of monthly cash payments for January, February, and March. Harry's Carryout Stores Cash Payments Schedule January February March Payments for purchases Labor expense Selling and administrative Overhead Taxes Dividends Total cash payments 2$ 0 $ 0 $ c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.) Harry's Carryout Stores Cash Budget January February March Total cash receipts Total cash payments Net cash flow Beginning cash balance
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 6 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Market Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SEE MORE TEXTBOOKS