Question

You are a general manager of a clothing retail chain called"hard luck clothing". your boss has...

You are a general manager of a clothing retail chain called"hard luck clothing". your boss has provided you with the following information and has asked you to prepare a cash budget for February and march. The owner has a particular format for you to use and has attached it to the information provided.

A. Budgeted Cash collection: January- $200,000 ,February:$240,000 .March-$225,000 ,April-$245,000

B.Cash payments for purchases: January-$77500 ,February- $73250 ,March- $68750 ,April- $84000

C. Budgeted sales: January-$375000 ,February-$250000 ,March-$225000 ,April-$275000

D.salaries (paid in the month in which they occur): Fixed( for the four month period in total)- $260000 ,Variable (as a % of sales)- 10.2%

E. Employee benefits are accrued and paid in the month following the accrual (expressed as a % of total fixed and variable salaries)- 11.5%

F. other expenses incurred and paid each month - $17225

G. Rent: Fixed (monthly rate and paid in current month)- $6875 , Variable (paid in the month following is expressed as a % of sales)- 8.2%

H. Miscellaneous financing payments (principal and interest- paid in the month incurred) January-$21375 , Feb-$22580 , March-$28250 April-$31225

I. The bank has extended you a line of credit for- $50,000 you must maintain a minimum monthly balance of- $5000 borrowing and repayments take place at the end of the month and must be in a multiples of- $500

J. The operating loan balance at the beginning of the February ................ $11500

K. monthly amortization on the equipment is............................................... $15000

l. the cash balance on February 1 is............................................................. $ 15750

Required: complete The attached cash budgeted for the months of February and March

                                                          Hard luck clothing- cash budget

                                                                       FEBRUARY                             MARCH

Beginning cash

Add- Cash receipts

Cash available

Less- Cash disbursements

Total cash disbursements

Cash excess/deficiency

Borrow/repay loan

Ending cash

Loan balance

  

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