ABBOTT, INC.
Minimum ending cash balance				$ 8,000
Cost of Goods Sold (as a percentage of sales)				60%
Gross margin (as a percentage of sales)				40%
Recent and forecast sales :
March (actual)				60,000
April				70,000
May				85,000
June				90,000
July				50,000
Desired ending inventories				30%
(percentage of next month's cost of goods sold)
Purchases paid as follows:
In month of purchase				50%
In following month				50%
Collection on sales:
Cash sales				20%
Credit sales				80%
All payments on credit sales are collected in the month following the sale.
Variable monthly expenses:
Shipping expenses (as a percentage of sales)				6%
Other expenses (as a percentage of sales)				4%
Fixed monthly expenses:
Wages and salaries				$ 7,500
Advertising				$ 6,000
Depreciation (per quarter)				$ 6,000
Equipment purchased in April				$ 11,500
Equipment purchased in May				$ 3,000
Dividends declared each quarter (Paid at End of Qtr.)				$ 3,500
Balance sheet at March 31:
Assets
Cash				$ 9,000
Accounts receivable				48,000
Inventory				12,600
Fixed assets, net of depreciation				214,100
Total assets				$ 283,700
Liabilities and Stockholders' Equity
Accounts payable				$ 18,300
Capital stock				190,000
Retained earnings				75,400
Total liabilities and stockholders' equity				$ 283,700
Agreement with Bank:
Maximum borrowing amount				$ 20,000
Repayment increments				$ 1,000
Required minimum cash balance				$ 8,000
Interest rate (per month) (not compounded)				1%
If able the company will pay the loan plus accumulated interest at the end of the quarter.