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Assumptions:

The firm makes $20\%$ of all sales for cash & collects $40\%$ of its sales in each of the $2$ months following the sale

Other cash inflows are expected to be $$12,000$ in September and April, $$15,000$ in January and March, and $$47,000$ in February

The firm pays cash for $10\%$ of its purchases, $50\%$ one month later and $40\%$ after $2$ months.

Wages and salaries amount to $20\%$ of the preceding month's sales

Rent of $$19,000$ must be paid monthly

Interest payments of $$20,000$ are due in January and April.

A principal payment of $$30,000$ is due in April

The firm expects to pay cash dividends of $$25,000$ in January and April

Taxes of $$80,000$ are due in April

The firm also intends to make a $$25,000$ cash purchase of fixed assets in December

Sales and puchases by month are expected to be as follows;

$\backslash$table$[[,2023,2024],[,$Sep,Oct,Nov,Dec,Jan,Feb,Mar,Apr$],[$Sales$,210,000,250,000,170,000,160,000,140,000,180,000,200,000,250,000],[$Purchases$,120,000,150,000,140,000,100,000,80,000,110,000,100,000,90,000]]$

Prepare a cash budget for Bubba's Bikes by completing the format laid out below and incorporating the above assumptions, highlighting your answers to the following:

c$)$ If Bubba were going to request a line of credit at the bank to cover financing for the period November to April, how large would this line have to be$?$

$\backslash$table$[[,$Sep,Oct,Nov,Dec,Jan,Feb,Mar,Apr$],[$Sales$],[$Cash rec.$],[1$ month$],[$Other rec.$],[$Total Rec.$],[,,,,,,,,],[$Purchases$],[$Cash$],[1$ month$],[2$ months$],[$Rent$],[$Interest$],[$Principal$],[$Dividends$],[$Taxes$],[$F$/$A purch.$],[$Total disp.$],[,,,,,,,,],[$Receipts$],[$Disburs$.],[$Net CF$],[$Beg$,$ Cash$],[$End Cash$],[$Req$.$ Fin.$],[],[,,,,,,,,],[$Excess$,,,,,,,,],[,,,,,,,,$

Please include all functions and formulas

Answer & Explanation Solved by verified expert

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