(15) 2a. Given the information that follows, prepare a cash budget for the XYZ Store for the first six months of 2019 . All prices and costs remain constant Sales are 86% for credit and 14% for cash With respect to credit sales, 45% are collected in the month after the sale, 30% in the second month, and 25% in the third, Bad-debt losses are insignificant . . Sales, actual and estimated, are (* for actual sales) $285,000* 310,000* 300,000* 250,000 300,000 October 2018 November 2018 December 2018 March 2019 $340,000 300,000 375,000 280,000 370,000 April 2019 May 2019 June 2019 July 2019 Merchandises are purchased one month before the anticipated sales at 76% (COGs). Assume all purchases arrived in the same month of ordering, and the company will pay the purchase exactly 1 month after placing January 2019 February 2019 . the order Wages and salaries are April 2019 May 2019 January 2019 February 2019 March 2019 $40,000 45,000 50,000 $65,000 55,000 52,000 June 2019 Rent is $7,000 a month Interest of $7,500 is due on the last day of each calendar quarter, and no quarterly cash dividends are planned A tax prepayment of $50,000 for 2019 income is due in April . A capital investment of $80,000 is planned in June, to be paid for then The company has a cash balance of $100,000 at December 31, 2018, which is the minimum desired level for cash. Funds can be borrowed in multiples of $10,000. (Ignore interest on such borrowings.) (5) 2b. Use the cash budget worked out in Part (a) and the following additional information to prepare a forecast income statement for the first half of 2016 for the XYZ Store. (Note that the store maintains a safety stock of inventory.) Inventory at 12/31/18 was S180,000 Depreciation is taken on a straight-line basis on $240,000 of assets with an average remaining life of 10 years and no salvage value The average tax rate is 34 percent