9A (5 marks) ABC Company is a retailer of baseball caps. It is preparing its budget for the months of January and February. It has made the following assumptions: 1) Sales are forecast to be $40,000 for January, $30,000 for February, and $160,000 for March. 2) Cost of goods sold is 25% of sales. 3) Inventory at the end of each month should be 15% of the next month's Cost of goods sold. 4) Inventory at the beginning of January is $1,200. Part 1 How much inventory (in dollars) should ABC Company purchase in January? A) $10,521 B) $13,895 C) $10,918 D) $9,429 E) $11,414 F) $7,940 G) $9,925 Part 2 Part b) How much inventory (in dollars) should ABC Company purchase in February? A) $11,756 B) $14,231 C) $12,375 D) $17,325 E) $9,900 F) $13,613 G) $13,118 Question 9B (8 marks) ABC Company is preparing its cash budget for the month of January 2021. It has completed everything except the financing section. ABC's assumptions are: 1) The cash balance cannot go below $15,000. 2) The interest rate per month is 1%. 3) Any necessary borrowing occurs at the beginning of the month. 4) Any loan repayments occur at the end of the month. 5) Interest expense is added to the loan payable. 6) ABC Company tries to minimize the amount of its loan, while making sure its cash balance does not fall below $15,00 Here is their cash budget so far: Cash balance, beginning $ 15,000 Add cash collections 90,000 Total cash available 105,000 Total cash disbursements 94,000 Cash available before financing (A) 11,000 Financing: Beginning loan balance 12,000 Add: Borrowings (B) ?? Add: Interest expense ?? Loan balance before repayments Less repayments (C) Ending loan balance Ending cash balance (A + B-C) 333333