Question

Triple-F Health Club (Family, Fitness, and Fun) is a not-for-profit, family-oriented health club. The club's board of directors is developing plans to acquire more equipment and expand club facilities. The board plans to purchase about $25,300 of new equipment each year and wants to establish a fund to purchas the adjoining property in four or five years. The adjoining property has a market value of about $300,300. The club manager, Jane Crowe, is concerned that the board has unrealistic goals in light of the club's recent financial performance. She has sought the help of a club member with an accounting background to assist her in preparing a report to the board supporting her concerns. The member reviewed the club's records, including this cash-basis income statement TRIPLE-F HEALTH CLUB Income Statement (Cash Basis) For Years Ended October 31 (in thousands) 2020 2019 $355.00 $302.95 235.17180.90 2.00 1.50 5592.17 9484,45 Cash revenues: Annual membership fees Lesson and class fees Miscellaneous Total cash revenues Cash expenses: Manager's salary and benefits Regular employees' wages and benefits Lesson and class employees' wages and benef Towels and supplies Utilities (heat and light) Mortgage interest Miscellaneous Total cash expenditures Tncrease in Cach $36.06 190.3 195.39 16.00 22.88 35.10 .00 $496.85 $ 95.32 5 36.06 .190.30 150.30 15.50 15.00 37.80 1.50 $446.46 $ 37.99

Prepare a cash budget

Answer 1

Cash Budget for Year 2021

2020 Growth Price Increase 2021 355.00 235.17 30 % 33.33% 10% 0 % 0 % 402.22 305.72 2.66 710.60 592.17 /% Particulars Operating cash Inflows Annual Membership Fees Lesson and Class Fees Miscellaneous Total Cash Revenues Operating cash Outflows Manager's Salary and Benefits Regular Employees Wages and Benefits Bonefits Lesson and Class Employees Wages and Benefits Towels and Supplies Utilities (Heat and Light) Mortgage Interest Miscellaneous Total Cash Expenditures 15% 15% 15% 25 % 36.06 190.30 195.39 16.00 22.00 35.10 2.00 496.85 41.47 218.85 224.70 20.00 27.50 32.18 2.50 567.20 Increase in cash from operating activities 95.32 143.40 Purchase of Equipment Payment of Previous Years Equipment Repayment of mortgage Total cash outflow from other than operating activities Net cash inflow 25.30 14.70 30.60 70.60 72.80