2. Grover Limited, liquid soaps is ready to begin its first quarter, in which peak sales occur. The company wants to re-assess its cash managenent strategy. Hence, senior manage provided data for the first quarter of the current year and the last to month of the year before. As a result, directors requested a cash budget for the period. a. On January 1, the beginning of the third quarter, the company will have a cash bulance of $110,000. b. Actual sales for the last two months of the prior quarter and bodgeted sales for the first quarter of 2022 are as follows All sales are on credit. Pust experiences show that 20% of a month's sales are collected in the month of the sale, 70% in the month following the sale, and 10% in the second month following the sale. c. Budgeted merchandise purchases and budgeted expenses for the third quarter are given below: Purchases as paid in full one month after the month of purchase. The total purchase for the month of December 2014 was $200,000. Other expenses include depreciation of $40,000 per month d. Equipment costing $20,000 will be purchased for cash during February 2015 , while a machine is to be bought at a cost of $69,000 during the month of March 2015. c. In preparing the cash budget, assume that the $50,000 loan will be made at the end of Jankary 2015 at 12% per annum. The loan as well as any interest will be paid at the end of the first quarter Required: (i) Prepare a schedule of expected cash collections for January, February, and March and for the quarter in total. 6 marks Paec 5 of 8 (ii) Prepare a cash budget, by month and in total, for the third quarter, 23 marks (iii) If the company needs a minimum cash balance of $25,000 to start each month, can the loan be repaid as planned? Explain. 2 marks