The aCCounting Net (TAN) provide services for non-for-profit organization. Their information is as follow at end of 2x14: Cash $70,000 Account Receivables 50,000 Equipment and Building 100,000 Account Payables 40,000 Notes Payables 10,000 Common Stock 90,

Exam 3 Budgets and cost of Money Problem 1. The aCCounting Net (TAN) provide services for non-for-profit organization. Their information is as follow at end of 2x14: Cash $70,000 Account Receivables 50,000 Equipment and Building 100,000 Account Payables 40,000 Notes Payables 10,000 Common Stock 90,000 Retained Earnings $80,000 Additional information: Account payable pertains to equipment purchased on December 2x14. October 2x14 revenues was $50,000, November 2x14 revenues was $60,000, and December 2x14 was $70,000. Budgeted January 2x15 revenues are projected 20% higher than previous month. Usually 40 % of monthly revenues are collected between 1-30 days, 50 % between 31-60 days and the remaining revenues are collected between 61-90 days. January monthly expenses are expected to be salaries $50,000, rent $4,000, depreciation $3,000 and $2,000 miscellaneous (not include interest nor depreciation expense). Expenses are paid in the month incurred. Equipment purchased on December 2x14, will be paid on next month since purchase. Note payable include a 12% annualized (at year) interest expense payable monthly and principal will be pay on October 2x15. Tax rate is 40%. TAN use a Net Present Value (NPV) instead of Internal Rate of Return (IRR). Some sales pertain to October 2x14 still uncollected at Jan 2x15. Required: Answer correctly and present full calculation to attain credit for each answer. 1. Prepare the cash budget for Jan 2x15. Value 25 pts. 2. Prepare the budgeted Income Statement for Jan 2x15. 25 pts. 3. Prepare the budgeted Balance Sheet for Jan 2X15. 35 pts. 4. Indicate the difference between NPV and IRR. 15 pts.