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Re:Plate is a not-for-profit grocery store that buys unused edible food from restaurants and for-profit grocery

stores and sells the food at belowmarket prices. It also offers cooking classes for a fee throughout the year. Its fiscal year is January 1-December 31. In FY 2017:

1. Re:Plate will begin the year with $21,000 in cash.

2. Re:Plate plans to buy 1,000,000 pounds of food at $1.25 per pound in cash throughout the year. (Use "Food" as the line item in the budgets.)

3. Re:Plate expects to sell all of its 1,000,000 pounds of food in inventory it acquires throughout the year, at an average price of $1.65 per pound. (Use "Grocery sales" as the line item in the budgets.)

4. Re:Plate plans to offer three cooking classes per week throughout the year. Each class will have 10 participants, each of whom will pay a $25 fee. (Use "Class fees" as the line item in the budgets.)

5. Re:Plate will pay $10,000 per month in rent, up from $9,500 per month in FY 2016. Rent will be $10,500 per month in FY 2018 Re:Plate pays rent one month in advance.

6. Re:Plate's total payroll will be $210,000 in salaries, up from $180,000 in FY 2016. In addition to salary, Re:Plate's employees are paid benefits valued at 40% of their salaries. The benefits rate will be unchanged from FY 2016. Employees are paid monthly with a 1- month lag. (Use "Salaries and benefits" as the line item in the budgets.)

7. Re:Plate will take out a $40,000 loan July 1. The loan will have an annual interest rate of 2%. An interest payment and a principal repayment of $10,000 will be due December 31.

8. Re:Plate will use the loan to purchase a new forklift that will have a useful life of 10 years and a salvage value of $5,000. Re:Plate also owns computer equipment it purchased in 2015 for $50,000; the equipment has no salvage value and a useful life of 5 years. Conduct an annual operating budget and a semiannual cash budget (showing the first half of the year, the second half of the year, and annual amounts in three side-by-side columns) for Re:Plate for FY 2017. Recall that interest expense and depreciation expense are further discussed in Chapters 5 and 10, respectively. 

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