Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Actual Forecast November December $300,000 January 320,000 February March Sales Credit sales Cash sales of the firm's sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 20 percent are paid in the month after sale and 80 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 40 percent of sales and is paid in the month of sales. Selling and administrative expense is 8 percent of sales and is also paid in the month of sales Overhead is $30,500 in cash per month amortization expense is $10.500 per month Taxes of $8.500 will be paid in January and dividends of $4,500 will be paid in March. Cash at the beginning of January is $90.000 and the minimum desired cash balance is $85.000 a. Prepare a schedule of monthly cash receipts for January, February and March Additional Information $300,000 April forecast $430,000 420,000 440,000 Collections in the month after credit sales Collections two months after credit sales Total cash receipts in Daniels Health Products Cash Receipts Schedule Novenber December $300000 $320000 90000 224000 600D 42000 January 340000 266000 114000 44800 256000 February $420000 294000 16000 53200 304000 March 440000 300000 132000 58800 336000 April 430000 301000 129000 61600 353000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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b. Prepare a schedule of monthly cash payments for January, February and March
Jin Daniels Health Products
Cash Payments Schedule
Payments for purchases
Labour expense
Selling and administrative expense
Overhead
Taxes
Dividends
Total cash payments
Total cash receipts
Total cash payments
Net cash flow
Beginning cash balance -
January
$
152000
30400
30500
Cumulative cash balance
Monthly loan or (repayment)
Cumulative loan balance
Ending cash balance
Jin Daniels Health Products
Cash Budget
January
February
c. Prepare a schedule of monthly cash budget with borrowings and repayments for January, February and March. (Do not leave any
empty spaces: input a O wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus
sign.)
168000
33600
30500
February
March
$
March
176000
35200
30500
Transcribed Image Text:b. Prepare a schedule of monthly cash payments for January, February and March Jin Daniels Health Products Cash Payments Schedule Payments for purchases Labour expense Selling and administrative expense Overhead Taxes Dividends Total cash payments Total cash receipts Total cash payments Net cash flow Beginning cash balance - January $ 152000 30400 30500 Cumulative cash balance Monthly loan or (repayment) Cumulative loan balance Ending cash balance Jin Daniels Health Products Cash Budget January February c. Prepare a schedule of monthly cash budget with borrowings and repayments for January, February and March. (Do not leave any empty spaces: input a O wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.) 168000 33600 30500 February March $ March 176000 35200 30500
Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr.
Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through
March. Following are actual and forecasted sales figures:
Forecast
Actual
November
$300,000 January
December 320,000 February
March
Additional Information
$300,000 April forecast $430,000
420,000
440,000
of the firm's sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 20 percent are paid in the
month after sale and 80 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and
received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are
received. Labour expense is 40 percent of sales and is paid in the month of sales. Selling and administrative expense is 8 percent of
sales and is also paid in the month of sales. Overhead is $30,500 in cash per month amortization expense is $10.500 per month
Taxes of $8.500 will be paid in January and dividends of $4,500 will be paid in March. Cash at the beginning of January is $90.000
and the minimum desired cash balance is $85.000.
a. Prepare a schedule of monthly cash receipts for January, February and March
Sales
Credit ales
Cash sales
Collections in the month after credit sales
Collections two months after credit sales
Total cash receipts
in Daniels Health Products
Cash Receipts Schedule
November
300000
210000
December
$120000
90000
224000
16000
43000
January
340000
266000
114000
44800
354000
February
$420000
294000
06000
53200
304000
March
440000
[300000
132000
58800
336000
$
April
$430000
301000
129000
61600
353000
Transcribed Image Text:Jim Daniels Health Products has eight stores. The firm wants to expand by two more stores and needs a bank loan to do this. Mr. Hewitt, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. Following are actual and forecasted sales figures: Forecast Actual November $300,000 January December 320,000 February March Additional Information $300,000 April forecast $430,000 420,000 440,000 of the firm's sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 20 percent are paid in the month after sale and 80 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the current month's expected sales. Materials are paid for in the month they are received. Labour expense is 40 percent of sales and is paid in the month of sales. Selling and administrative expense is 8 percent of sales and is also paid in the month of sales. Overhead is $30,500 in cash per month amortization expense is $10.500 per month Taxes of $8.500 will be paid in January and dividends of $4,500 will be paid in March. Cash at the beginning of January is $90.000 and the minimum desired cash balance is $85.000. a. Prepare a schedule of monthly cash receipts for January, February and March Sales Credit ales Cash sales Collections in the month after credit sales Collections two months after credit sales Total cash receipts in Daniels Health Products Cash Receipts Schedule November 300000 210000 December $120000 90000 224000 16000 43000 January 340000 266000 114000 44800 354000 February $420000 294000 06000 53200 304000 March 440000 [300000 132000 58800 336000 $ April $430000 301000 129000 61600 353000
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