A restaurant chain is forecasting cash borrowing needs for the next three months. The controller for the company has assembled these forecasted data:

Forecasted amounts	January	February	March
Cash collections for customers	$120,000	$90,000	$150,000
Cash Payments
Direct materials purchases	25,000	35,000	30,000
Direct labor costs	17,000	15,000	18,000
Manufacturing overhead costs	30,000	25,000	35,000
Selling and administrative expenses	16,000	13,000	20,000
Interest payments	3,000	3,000	3,000
Income tax payments	0	0	5,000
Dividend payments	0	20,000	0
Machine purchase	0	40,000	0
Beginning cash balance, January 1: $7,000
Minimum month-end cash balance: $5,000

The controller is using these data to construct a month-by-month cash budget for January, February, and March.

For simplicity, assume that loans are repaid as soon as possible, when surplus cash is available.

According to these data, how much borrowing is needed in February?

• $25,000
• $30,000
• $54,000
• $59,000

100% of purchases are on credit. Of the credit purchases, 5% are paid during the month of the purchase, 65% in the month following the purchase, and 30% in the second month following the purchase.

Sales for September and October of Year 1 were $100,000 and $150,000, respectively.

What is the forecasted amount of total cash payments for purchases in January?

• $371,000
• $397,000
• $406,000
• $413,000