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 throughMarch. The following are actual and forecast sales figures:NovemberDecemberActual$ 240,000 January260,000 FebruaryMarchForecastAdditional Information$ 320,000 April forecast$360,000360,000370,000Of the firm's sales, 60 percent are for cash and the remaining 40 percent are on credit. Of credit sales, 30 percent are paid in themonth after sale and 70 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased andreceived each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month afterthey are received. Labor expense is 40 percent of sales and is paid for in the month of sales. Selling and administrative expense is 15percent of sales and is paid in the month of sales. Overhead expense is $22,000 in cash per month.Depreciation expense is $10,200 per month. Taxes of $8,200 will be paid in January, and dividends of $3,000 will be paid in March.Cash at the beginning of January is $84,000, and the minimum desired cash balance is $79,000. b. Prepare a schedule of monthly cash payments for January, February, and March.Note: Input all amounts as positive. Leave no cells blank be certain to enter O wherever required.Payments for purchasesLabor expenseSelling and administrativeOverheadTaxesDividendsTotal cash paymentsJayden's Carryout Stores.Cash Payments ScheduleJanuaryFebruaryMarch

Cash payment schedule is a financial budget that shows the outflow or payments of all accounts…

b. Prepare a schedule of monthly cash payments for January, February, and March. Note: Input all amounts as positive. Leave no cells blank be certain to enter O wherever required. Payments for purchases Labor expense Selling and administrative Overhead Taxes Dividends Total cash payments Jayden's Carryout Stores. Cash Payments Schedule January February March

b. Prepare a schedule of monthly cash payments for January, February, and March. Note: Input all amounts as positive. Leave no cells blank be certain to enter O wherever required. Payments for purchases Labor expense Selling and administrative Overhead Taxes Dividends Total cash payments Jayden's Carryout Stores. Cash Payments Schedule January February March

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 1PROB

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On January 1, Sweet Pleasures, Inc., begins business. The company has 14,000 cash on hand and is attempting to project cash receipts and disbursements through April 30. On May 1, a note payable of 10,000 will be due. This amount was borrowed on January 1 to carry the company through its first four months of operation. The unit purchase cost of the companys single product, a box of Sweet Pleasures chocolates, is 12. The unit sales price is 28. Projected purchases and sales in units for the first four months are: Sales terms call for a 5% discount if paid within the same month that the sale occurred. It is expected that 50% of the billings will be collected within the discount period, 25% by the end of the month after purchase, 19% in the following month, and 6% will be uncollectible. Approximately 60% of the purchases are paid for in the month purchased. The rest are due and payable in the next month. Total fixed marketing and administrative expenses for each month include cash expenses of 5,000 and depreciation on equipment of 2,000. Variable marketing and administrative expenses total 6 per unit sold. All marketing and administrative expenses are paid as incurred. REQUIREMENT You have been asked to prepare a cash budget for the next four months to see if the loan can be repaid. Review the worksheet CASHBUD that follows these requirements. The problem data have already been entered in the Data Section of the worksheet.
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