Below is the budgeted data for Geno Corporation for January and February of 2017:

January

February Sales

$403,200

$448,000 Direct materials purchases

134,400

140,000 Direct labor

100,800

112,000 Manufacturing overhead

78,400

84,000 Selling and administrative expenses

88,480

95,200

The sales are all made on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. The company wants to maintain a cash balance of $56,000.

Other data: 1.

Credit sales: November 2016, $280,000; December 2016, $358,400. 2.

Purchases of direct materials: December 2016, $112,000. 3.

Other receipts: JanuaryCollection of December 31, 2016, notes receivable $16,800;

FebruaryProceeds from sale of investments $6,720. 4.

Other disbursements: FebruaryPayment of $6,720 cash dividend.

Required:

a) Make a schedule of expected payments for direct materials purchases in January and February of 2017

b) If the company is projecting a cash balance of $40,000 at the end of January, how much would it be required to borrow. List 3 ways that the company could finance this amount.