10P10.49B (LO 4) The Big Boy Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from July 1 through June 30. Production occurs only in the first quarter (July to September), but sales take place throughout the year. The sales forecast for the coming year shows the following: First quarter Second quarter $390,000 750,000 Third quarter Fourth quarter $390,000 390,000 There are no cash sales, and the company expects to collect the beginning balance of receivables in the first quarter. Subsequent collections are two-thirds in the quarter when sales take place and one-third in the following quarter. Materials purchases valued at $360,000 are made in the first quarter and none are made in the last three quarters. The company pays when it purchases the materials. Direct labour of $350,000 is incurred and paid only in the first quarter. Factory overhead of $430,000 is also incurred and paid in the first quarter and is at a standby level of $100,000 during the other three quarters. The company pays selling and administrative expenses of $50,000 each quarter throughout the year. Big Boy has an operating line of credit with its bank at an interest rate of 6% per annum. The company plans to keep a cash balance of at least $8,000 at all times, and it will borrow and repay in multiples of $5,000. It makes all borrowings at the beginning of a quarter, and makes all payments at the end of a quarter. It pays interest only on the portion of the loan that it repays in a quarter. The company plans to purchase equipment in the second and fourth quarters for $150,000 and $50,000, respectively. The cash balance on July 1 is $23,000 and accounts receivable total $130,000. Instructions Prepare a cash budget for the year. Show receipts, disbursements, the ending cash balance before bor- rowing, the amounts borrowed and repaid, interest payments, and the ending cash balance