Jayden's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mrs. 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 November December $460,000 January 480,000 February March Additional Information $540,000 April forecast $470,000 580,000 480,000 Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 35 percent are paid in the month after sale and 65 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 35 percent of sales and is paid for in the month of sales. Selling and administrative expense is 15 percent of sales and is paid in the month of sales. Overhead expense is $26,000 in cash per month. Depreciation expense is $11,300 per month. Taxes of $9,300 will be paid in January, and dividends of $8,500 will be paid in March. Cash at the beginning of January is $106,000, and the minimum desired cash balance is $101,000. c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. Note: Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0. Leave no cells blank be certain to enter O wherever required. Total cash receipts Total cash payments Net cash flow Jayden's Carryout Stores. Cash Budget January $ 503,500 $ February March (521,300) 540,500 $ (548,000) 517,000 (466,500) (17,800) (7,500) 50,500 Beginning cash balance 106,000 101,000 101,000 Cumulative cash balance 88,200 93,500 151,500 Monthly loan (or repayment) Ending cash balance 88,200 93,500 151,500 Cumulative loan balance
Jayden's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mrs. 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 November December $460,000 January 480,000 February March Additional Information $540,000 April forecast $470,000 580,000 480,000 Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 35 percent are paid in the month after sale and 65 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 35 percent of sales and is paid for in the month of sales. Selling and administrative expense is 15 percent of sales and is paid in the month of sales. Overhead expense is $26,000 in cash per month. Depreciation expense is $11,300 per month. Taxes of $9,300 will be paid in January, and dividends of $8,500 will be paid in March. Cash at the beginning of January is $106,000, and the minimum desired cash balance is $101,000. c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. Note: Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0. Leave no cells blank be certain to enter O wherever required. Total cash receipts Total cash payments Net cash flow Jayden's Carryout Stores. Cash Budget January $ 503,500 $ February March (521,300) 540,500 $ (548,000) 517,000 (466,500) (17,800) (7,500) 50,500 Beginning cash balance 106,000 101,000 101,000 Cumulative cash balance 88,200 93,500 151,500 Monthly loan (or repayment) Ending cash balance 88,200 93,500 151,500 Cumulative loan balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Jayden's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mrs.
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
November
December
$460,000 January
480,000 February
March
Additional Information
$540,000 April forecast $470,000
580,000
480,000
Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 35 percent are paid in the
month after sale and 65 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 35 percent of sales and is paid for in the month of sales. Selling and administrative expense is 15
percent of sales and is paid in the month of sales. Overhead expense is $26,000 in cash per month.
Depreciation expense is $11,300 per month. Taxes of $9,300 will be paid in January, and dividends of $8,500 will be paid in March.
Cash at the beginning of January is $106,000, and the minimum desired cash balance is $101,000.
c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March.
Note: Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0. Leave no cells
blank be certain to enter O wherever required.
Total cash receipts
Total cash payments
Net cash flow
Jayden's Carryout Stores.
Cash Budget
January
$ 503,500 $
February
March
(521,300)
540,500 $
(548,000)
517,000
(466,500)
(17,800)
(7,500)
50,500
Beginning cash balance
106,000
101,000
101,000
Cumulative cash balance
88,200
93,500
151,500
Monthly loan (or repayment)
Ending cash balance
88,200
93,500
151,500
Cumulative loan balance
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