(Cash budget) The January 31, 1996, balance sheet of Jane’s Trophies follows:

Additional information about the company includes the following:
■ Expected sales for February and March are $120,000 and $130,000, respectively.
* The collection pattern from the month of sale forward is 50 percent, 48 per¬ cent, and 2 percent uncollectible.
■ Cost of goods sold is 75 percent of sales.
* Purchases each month are 55 percent of the current month’s sales and 45 percent of the next month’s projected sales. All purchases are paid for in full in the month following purchase.
■ Other cash expenses each month are $21,500. The only noncash expense each month is $4,000 of depreciation.

a. What are budgeted cash collections for February 1997?

b. What will be the Inventory balance at February 28, 1997?

c. What will be the projected balance in Retained Earnings at February 28, 1997?

d. If the company wishes to maintain a minimum cash balance of $8,000, how much will be available for investment or need to be borrowed at the end of February 1997?LO1

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Cash ASSETS Accounts Receivable (Net LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,000 Accounts Payable $ 58,400 of Allowance for Uncollectibles of $2,000) 34,000 Inventory 52,400 Common Stock $90,000 Plant Assets (Net of Accumulated Retained Earnings (Deficit) (14,000) 76,000 Depreciation of $60,000) 36,000 Total Liabilities Total Assets $134,400 and Stockholders' Equity $134,400