NAG Company started its business in March 2022. That company produces shoes. To gain investors trust, NAG companies prep

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NAG Company started its business in March 2022. That company
produces shoes. To gain investors trust, NAG companies prepare
projected cash flow for the next 3 months. Using information below,
prepare cash budget for April, May, and June 2022. FINANCIAL DATA
AT THE END OF MARCH 2022 a) Product sales in March 2022 were
$525,000 b) Ending inventory in March 2022 is $220,000 c) There is
no accounts payable at the end of March 2022 d) The cash balance in
March 2022 is $12,000 SALES, PRODUCTION, AND INVENTORY ASSUMPTIONS
a) Sales projection for: April 2022 is $600,000, May 2022 is
$705,000, June 2022 is $750,000, July 2022 is $780,000 and August
2022 is $800,000 b) 35% sales are made on credit and will be
collected on the following month. c) Company's COGS is 70% of
sales. d) 50% inventories are purchased in credit and will paid on
the following month e) NAG inventory policy is to begin a month
with sufficient to cover 50% of sales for the month plus a $10,000
cushion. f) It tries to maintain 50% of COGS as an inventory at the
beginning of month. g) The minimum cash balance is $12,000 h)
Owners will lend funds in case of cash flow shortage, it loan has
1.5% interest per month COST ASSUMPTIONS a) Employee's salary is
$15,000 every month. Employees also earn a commission, 2% of each
month sales. b) A half of salaries and commissions will be paid in
current month and another half will be paid in the following month
c) Building rental per month is $7,500 d) Insurance expenses is
$2,100 per month e) Miscellaneous expense is 5% of monthly sales f)
Owner plans to purchase machines in April 2022, machines price is
$190,000 g) Depreciation expense (include new machines) is $7,500
each month. h) The tax that should be paid by the company each
month is 1% of the monthly sales.
You are asked to create:
a. Cash Schedule for April-July b. Purchase Schedule April-July
c. Wages and Commission Schedule for April-July d. Cash Budget for
April-July