Omonia Manufacturing has planned a cash budget for the first six months of 2011. Estimates show...

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Omonia Manufacturing has planned a cash budget for the first six months of 2011. Estimates show that $60,000 should be collected in March and June for dividends re- ceived on investments in the shares of other companies. Each month, fixed operating expenses for wages, rent, heat, and light must be paid in the amount of $220,000. Collections on accounts receivable are estimated as follows: 60% collected in month of sale 25% collected in month following sale 15% collected in second month following sale Payments for merchandise purchased are scheduled so that 70% of the payments are made in the month of purchase with the balance paid in the following month. The cash balance is estimated at $175,000 for January 1. Estimated net sales and purchases by month are as follows. Net Sales Purchases pnilla Hat 2010 November $560,000 $ 320,000 emuloy December 550,000 380,000 2011 January 640,000 420,000 February 700,000 400,000 March 900,000 1,000,000 April 580,000 280,000 May 460,000 260,000 June 520,000 260,000 An income tax payment of $100,000 is to be made in February, and a payment of $150,000 is to be made in June. A loan repayment of $80,000 will be made in February with interest added of $12,000. No other interest payments on money borrowed will be made during the months of January, February, March, and April. A minimum cash balance of $150,000 must be available at the end of each month. Instructions IA 1. Prepare a schedule of collections on receivables for the months of January, February, March, and April. 2. Prepare a schedule of payments for purchases for the months of January, February, March, and April. 3. Prepare a comprehensive and complete cash budget for the months of January, February, March, and April. Identify the months, if any, when short-term loans will be required and the amounts of the loans. Also, indicate months, if any, when short- term loans can be repaid. Omonia Manufacturing has planned a cash budget for the first six months of 2011. Estimates show that $60,000 should be collected in March and June for dividends re- ceived on investments in the shares of other companies. Each month, fixed operating expenses for wages, rent, heat, and light must be paid in the amount of $220,000. Collections on accounts receivable are estimated as follows: 60% collected in month of sale 25% collected in month following sale 15% collected in second month following sale Payments for merchandise purchased are scheduled so that 70% of the payments are made in the month of purchase with the balance paid in the following month. The cash balance is estimated at $175,000 for January 1. Estimated net sales and purchases by month are as follows. Net Sales Purchases pnilla Hat 2010 November $560,000 $ 320,000 emuloy December 550,000 380,000 2011 January 640,000 420,000 February 700,000 400,000 March 900,000 1,000,000 April 580,000 280,000 May 460,000 260,000 June 520,000 260,000 An income tax payment of $100,000 is to be made in February, and a payment of $150,000 is to be made in June. A loan repayment of $80,000 will be made in February with interest added of $12,000. No other interest payments on money borrowed will be made during the months of January, February, March, and April. A minimum cash balance of $150,000 must be available at the end of each month. Instructions IA 1. Prepare a schedule of collections on receivables for the months of January, February, March, and April. 2. Prepare a schedule of payments for purchases for the months of January, February, March, and April. 3. Prepare a comprehensive and complete cash budget for the months of January, February, March, and April. Identify the months, if any, when short-term loans will be required and the amounts of the loans. Also, indicate months, if any, when short- term loans can be repaid.