1. Prepare a monthly cash budget for Jones Products Inc. for the first six months of...

 

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1. Prepare a monthly cash budget for Jones Products Inc. for the first six months of 2023 Use the following assumptions to prepare your cash budget: Revenue estimates (in thousands): Nov Dec Jan * Historical $340 $380 $280 Collection on sales (all sales on credit): Current month: Purchases of raw materials: Other: Feb Mar Apr 10% First month following: 70% Second month following: 19% (1% bad debt losses) Line-of-credit: 71% of projected following month sales Payment on purchases: Other expenses and disbursements Utilities: Wages and salaries: Other fixed expenses: Interest on bonds (not LOC): Quarterly tax payments: Equipment maintenance: $290 $290 $320 May Jun Jul 30 days following purchase of materials (in thousands): $8/month $45 + 2% current month's sales $6/month $380 $420 $440 $8.5 in May ($0 all other months) $12/month in Mar and Jun ($0 all other months) $35 in Feb ($0 all other months) $250,000 maximum available credit No maintenance fee 5.50% interest (annual rate, compounded monthly) on ending balance of prior month A minimum cash balance of $60K must be maintained at the end of each month A balance of $47K on the line-of-credit exists at the end of Dec Quarterly dividends of $15K will be paid in Jan and Apr ($0 all other months) Any cash in excess of $60K at the end of each month will first be used to pay down any existing balance on the LOC, then swept into money market funds. Money market funds will earn 2.1% per annum (0.175% per month) 1. Prepare a monthly cash budget for Jones Products Inc. for the first six months of 2023 Use the following assumptions to prepare your cash budget: Revenue estimates (in thousands): Nov Dec Jan * Historical $340 $380 $280 Collection on sales (all sales on credit): Current month: Purchases of raw materials: Other: Feb Mar Apr 10% First month following: 70% Second month following: 19% (1% bad debt losses) Line-of-credit: 71% of projected following month sales Payment on purchases: Other expenses and disbursements Utilities: Wages and salaries: Other fixed expenses: Interest on bonds (not LOC): Quarterly tax payments: Equipment maintenance: $290 $290 $320 May Jun Jul 30 days following purchase of materials (in thousands): $8/month $45 + 2% current month's sales $6/month $380 $420 $440 $8.5 in May ($0 all other months) $12/month in Mar and Jun ($0 all other months) $35 in Feb ($0 all other months) $250,000 maximum available credit No maintenance fee 5.50% interest (annual rate, compounded monthly) on ending balance of prior month A minimum cash balance of $60K must be maintained at the end of each month A balance of $47K on the line-of-credit exists at the end of Dec Quarterly dividends of $15K will be paid in Jan and Apr ($0 all other months) Any cash in excess of $60K at the end of each month will first be used to pay down any existing balance on the LOC, then swept into money market funds. Money market funds will earn 2.1% per annum (0.175% per month)

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