1) Projected sales for November 2019 are $230,000. Credit sales are typically 85% of total sales. Helping Hands credit experience indicates that 12% of credit sales are collected during the month of sale, 74% in the month following the sale, and 14% in the second month following the sale. Experience shows the remaining credit sales are uncollectible.

2) Helping Hands cost of goods sold generally runs at 60% of sales. Inventory is purchased on account and 12% of each months purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the company attempts to have inventory on hand at the end of each month equal to 25% of the next months projected cost of goods sold.

3) The controller has estimated that Helping Hands other monthly expenses will be as follows:

Sales salaries $30,000 Advertising and promotion $6,000

Administrative salaries $11,000

Depreciation $8,000 Interest on bonds $1,250

Property taxes $4,000

In addition, sales commissions run at the rate of 3.0 percent of sales. Sales commissions are paid in the month following the month of sale.

4) The company president has indicated that the company should invest $200,000 in an automated inventory-handling system to control the movement of inventory in the companys warehouse just after the new year begins. The president would like to purchase the equipment primarily from the companys cash and marketable securities. However, the president believes the company should have a minimum cash balance of $20,000 at the end of each month. If necessary, the remainder of the equipment purchase may be financed using short-term credit from a local bank. The minimum lending period for such a loan is three months (this means the earliest the loan can be paid off is March 31st). The current short-term interest rates are 6 percent per year and are expected to remain at this rate through the time the equipment is purchased. If a loan is necessary, the entire amount required for the quarter must be borrowed on January 1st and must be in a $1,000 increment. The loan is a short term loan and the president has decided it should be paid off at the end of the first quarter if possible. If the entire amount cannot be repaid at March 31st, any partial payment will be paid at the end of the first quarter and in a $1,000 increment.

5) Helping Hands board of directors has indicated an intention to declare and pay dividends of $100,000 on the last day of each quarter.

6) The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Helping Hands bonds is paid semiannually on February 28 and August 31 for the preceding six- month period.

7) Property taxes are paid quarterly on March 31, June 30, September 30, and December 31 for the preceding three-month period.

Helping Hand is a small, rapidly growing wholesaler of consumer electronic products. The company's main product lines are small kitchen appliances and power tools. The marketing manager has recently completed a sales forecast. She believes the company's sales will increase by 2 percent each month over the previous month's sales from December 2019 through March 2020. Then sales are expected to remain constant for several months. Helping Hand's projected balance sheet as of December 31, 2019 is as follows: Cash 140,000 Accounts receivable 202,851 Marketable securities 55,000 Inventory 35,894 Buildings and equipment (net of accumulated depreciation) 610,000 Total assets $ 1,043,745 $ 124,488 7,038 5,000 Accounts payable Sales commissions payable Bond interest payable Property taxes payable Bonds payable (3%, due in 2023) Common stock Retained earnings Total liabilities and stockholders' equity 500,000 250,000 157,219 1,043,745 $