Question

Chilly Pepper, Inc. provided the following information: • Projected sales for July, $120,000; August, $195,000, September $165,000 • Projected merchandise purchases for August, $150,000; September $180,000 • Chilly Pepper estimates that it will collect 40% of its sales in the month of sale, 35% in the month after the sale, and 22% in the second month following the sale. Three percent of all sales are estimated to be bad debts. • Chilly Pepper pays 30% of merchandise purchases in the month purchased and 70% in the following month. • General operating expenses are budgeted to be $20,000 per month. Chilly Pepper pays operating expenses in the month incurred. • Chilly Pepper makes loan payments of $3,000 per month of which $400 is interest and the remainder is principal. • Chilly Pepper’s bank requires a minimum end of month cash balance of $10,000. If Chilly Pepper’s cash balance is less than $10,000, it borrows against its line of credit. show all work

A. Prepare Chilly Pepper’s Schedule of Projected Cash Receipts for September.

B. Prepare Chilly Pepper’s Schedule of Projected Cash Payments for MERCHANDISE for September.

C. Prepare Chilly Pepper’s Project Cash Budget for September.

Answer 1

A. Chilly Pepper’s Schedule of Projected Cash Receipts for September is as follows:

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B. Chilly Pepper’s Schedule of Projected Cash Payments for 'MERCHANDISE' for September is as follows:

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C. Chilly Pepper’s Project Cash Budget for September is as follows: