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Facey Publishing has a line of credit with their bank and must keep a $15,000 minimum balance each month. There is no outstanding loan at the beginning of January Loans can be borrowed and repaid in any amount. The cash balance on January 1 is expected to be $12.000 and the company can borrow at an interest rate of 3% per annum

Sales were $40,000 in December, and are budgeted to be $20,000 in January and $26,000 in February. All sales are on account and are collected 50% in the month of sale and 50% in the following month

Purchases are budgeted to be $27,000 in January and 55,000 in February Purchases are paid in full in the month of purchase

All other expenses are listed below, and are all paid in cash in the month incurred:

Salaries

$2,700 per month

Commissions

10% of sales per month

Depreciation

2.000 monthly

Rent

$1500 per month

Advertising

$2.000 per month

Prepare a cash budget for January and February for Facey Publishing.

Please provide calculations too.

Question 2 14 points Save Answer Facey Publishing has a line of credit with their bank and must keep a $15,000 minimum balance each month. There is no outstanding loan at the beginning of January Loans can be borrowed and repaid in any amount. The cash balance on January 1 is expected to be $12,000 and the company can borrow at an interest rate of 3% per annum Sales were $40,000 in December, and are budgeted to be $20,000 in January and $26,000 in February. All sales are on account and are collected 50% in the month of sale and 50% in the following month Purchases are budgeted to be $27.000 in January and $5,000 in February. Purchases are paid in full in the month of purchase All other expenses are listed below, and are all paid in cash in the month incurred: Salaries $2,700 per month Commissions 10% of sales per month Depreciation 2.000 monthly Rent $1500 per month Advertising $2,000 per month A Prepare a cash budget for January and February for Facey Publishing - (14 marks) Facey's Cash Budget

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