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  3. 2. (4 points) olde corporation is preparing a cash

2. (4 points) Olde Corporation is preparing a cash budget for the first two months...

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Accounting

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2. (4 points) Olde Corporation is preparing a cash budget for the first two months of the coming year. The following data have been forecasted: January February $750,000 $800,000 450,000 480,000 Sales Purchases Operating expenses: Payroll Advertising Rent Depreciation End of January balances: Cash Bank loan 146,800 52,700 8.750 23,750 167,400 62,800 8.750 23,750 120.000 480.000 Additional data: (1) Sales are 40% on cash and the collection pattern for credit sales is 40% in the month following the month of sale, and 20% in the month thereafter. Total sales in December of the prior year were $1,000,000. (2) Purchases are all on cash (3) Operating expenses are paid in the month incurred. (4) The firm desires to maintain its cash balance at $150,000 at the end of each month. (5) Loans are used to maintain the minimum cash balance. Repayments are made (at the end of the month) whenever the cash balance exceeds $150,000 What is the amount of the loan balance at the end of February (after loan repayments, if any)

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