14.5 Please find the disbursements for the month of JANUARY - JUNE

(Preparation of a cash budget) Lewis Printing has projected its sales for the first 8 months of 2019 as follows: Lewis collects 20 percent of its sales in the month of the sale, 50 percent in the month following the sale, and the remaining 30 percent 2 months following the sale. During November and December of 2018, Lewis's sales were $240,000 and $165,000, respectively. Lewis purchases raw materials 2 months in advance of its sales. These purchases are equal to 60 percent of its final sales. The supplier is paid 1 month after delivery. Thus, purchases for April sales are made in February and payment is made in March. In addition, rent expense is $10,000 per month and other expenses total $20,000 a month. Beginning in March, quarterly tax prepayments of $23,500 are made. The company's cash balance as of December 31, 2018, was $28,000; a minimum balance of $20,000 must be maintained at all times to satisfy the firm's bank line of credit agreement. Lewis has arranged with its bank for short-term credit at an interest rate of 12 percent per annum (1 percent per month) to be paid monthly. Borrowing to meet estimated monthly cash needs takes place at the end of the month, and interest is not paid until the end of the following month. Consequently, if the firm needed to borrow $50,000 during April, then it would pay $500 ( = 0.01 * $50,000) in interest during May. Finally, Lewis follows a policy of repaying its outstanding short-term debt in any month in which its cash balance exceeds the minimum desired balance of $20,000. (Click on the following icon in order to copy its contents into a spreadsheet.) January February March $100,000 140,000 170,000 April May June $280,000 275,000 180,000 July August $220,000 180,000 Fill in the Disbursements for the month of January: (Round to the nearest dollar.) Nov Dec Jan Feb Mar Apr May June Cash Disbursements: Purchases Rent Other Expenses Tax Deposits Interest on short-term loan Total Disbursements