Please use the values from the question submitted.
Mary and Kay, Inc., a distributor of cosmetics throughoutFlorida, is in the process of assembling a cash budget for thefirst quarter of 20x1. The following information has been extractedfrom the company’s accounting records:
All sales are on account. Sixty percent of customer accounts arecollected in the month of sale; 30 percent are collected in thefollowing month. Uncollectibles amounting to 10 percent of salesare anticipated, and management believes that only 20 percent ofthe accounts outstanding on December 31, 20x0, will be recoveredand that the recovery will be in January 20x1.
Sixty percent of the merchandise purchases are paid for in themonth of purchase; the remaining 40 percent are paid for in themonth after acquisition.
The December 31, 20x0, balance sheet disclosed the followingselected figures: cash, $90,000; accounts receivable, $210,000; andaccounts payable, $75,000.
Mary and Kay, Inc. maintains a $90,000 minimum cash balance atall times. Financing is available (and retired) in $1,000 multiplesat an 10 percent interest rate, with borrowings taking place at thebeginning of the month and repayments occurring at the end of themonth. Interest is paid at the time of repaying principal andcomputed on the portion of principal repaid at that time.
Additional data:
| January | February | March |
| Sales revenue | $ | 540,000 | | $ | 630,000 | | $ | 645,000 | |
| Merchandise purchases | | 360,000 | | | 390,000 | | | 510,000 | |
| Cash operating costs | | 102,000 | | | 81,000 | | | 144,000 | |
| Proceeds from sale of equipment | | — | | | — | | | 24,000 | |
|
Required:
Prepare a schedule that discloses the firm’s total cashcollections for January through March.
Prepare a schedule that discloses the firm’s total cashdisbursements for January through March.
Prepare a schedule that summarizes the firm’s financing cashflows for January through March.
