Administrative salaries $21,000 Depreciation $25,000 (Includes depreciation on new equipment purchased at beginning of Quarter 1) Interest on Bonds $2,500 Property taxes $900 Sales Commissions --- 1 percent of current month's sales (4) The Company President has indicated that Observer will be investing $125,000 in equipment to be used in the firm's warehouse just after the New Year begins. This equipment purchase will be financed from the company's cash and marketable securities. However, the President noted that Observer should keep a minimum cash balance of $25,000. If necessary, the remainder of the equipment purchased will be financed using short-term credit from the Karch Bank. The minimum period for such a loan is 3 months with short- term interest rates being 10% per year. If a loan is needed the President has decided that it should be paid off at the end of the Quarter 1, if possible. (5) Observer's Board of Directors has indicated an intention to declare and pay cash dividends of $50,000 on the last day of each quarter. (6) The interest on any short-terrn borrowing will be paid when the loan is repaid. Interest on Observer's Bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. (2) Property taxes are paid semi-annually on February 28 and August 31 for the preceding six-month period. Required: Complete the Observer Company's Master Budget for Quarter 1 of 20x2 using the Excel spreadsheet provided