FINA 3562 Project 2 data - Ritewell Publishers Sales, purchase

Requirements:
Please use the data from the following table to complete the cash budget in Excel spreadsheets.
You can use the Excel file (FINA 3562 Project 2 data.xlsx) that I uploaded on Blackboard. To
complete the cash budget, you will have to work on the schedules of expected cash collections
and payments first. Please set formulae by referencing to the data in Excel spreadsheets. The
following table lists the data from the budget of Ritewell Publishers. 55% the company’s sales
are for cash on the nail; the other 45% are paid for with a one-month delay. The company pays
all its credit purchase with a one-month delay. Credit purchases in January were $30,000, and
total sales in January were $180,000.

Ritewell Publishers
Sales, purchase, and other budgets January Total sales February March April $ 180,000 $200,000 $ 220,000 $ 180,000 Purchases of material For cash 70,000 80,000 60,000 40,000 30,000 40,000 Selling and admin. expenses 30,000 30,000 30,000 Income taxes 14,000 14,000 14,000 Dividends 3,000 3,000 3,000 Equipment purchase 100,000 0 For credit 30,000 We make these assumptions to simplify the analysis: 0 * Ritewell Publishers has an open line of credit with its bank, which can be used as needed to
bolster the cash position.
* The company desires to maintain a $18,000 minimum cash balance at the end of each month.
Therefore, borrowing must be sufficient to cover the cash shortfall and to provide for the
minimum cash balance of $18,000.
* All borrowings and repayments must be in multiples of $1,000 amounts, and interest is 6
percent per annum.
* Interest is computed and paid on the principal during the borrowing period.
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* All borrowings take place at the beginning of a month, and all repayments are made at the end
of a month. The company will take a loan at the beginning of February, repaying part of the loan
at the end of March and the remaining balance at the end of April. At the end of March, the
company will repay the loan as much as possible but also keeps the minimum cash balance of
$18,000. Repayment in March is based on available cash from operating activities. You have to
figure out the loan amount and repayment amounts.
* The company pays the selling and administrative expenses, income taxes, dividends, and pays
for equipment purchase at the end of a month.
Please refer to the example of cash budget in chapter 6 Excel file posted on Blackboard. The
interest payment made at the end of March is computed as:
Principal of the loan x Interest rate on the loan x borrowing period .
The interest payment made at the end of April is computed as:
Remaining principal of the loan x Interest rate on the loan x borrowing period .
Because the interest rate on the loan is an annual rate, the borrowing period will be adjusted to
a fraction of 12 months.
Part of the screenshot is attached for your reference. The explanations for most of the items
have been inserted as comments in the Excel file. I am sure that everyone can complete the
work.