Brin Inc., an office supplies speclalty store, prepares its master budget on a quarterly basis. The following data have been assembled

to assist In preparation of the master budget for the first quarter:

a$.$ As of December $31($the end of the prior quarter$),$ the company's general ledger showed the following account balances:

b$.$ Actual sales for December and budgeted sales for the next four months are as follows:

c$.$ Sales are $20\%$ for cash and $80\%$ on credit. All payments on credit sales are collected in the month following sale. The accounts

recelvable at December $31$ are a result of December credit sales.

d$.$ The company's gross margin is $40\%$ of sales.

e$.$ Monthly expenses are budgeted as follows: salarles and wages, $$25,000$ per month; advertising, $$68,000$ per month; shipping, $5\%$

of sales; depreclation, $$15,000$ per month; other expenses, $3\%$ of sales.

f$.$ At the end of each month, Inventory Is to be on hand equal to $25\%$ of the following month's sales needs, stated at cost$.$

g$.$ One$-$half of a month's Inventory purchases are pald for in the month of purchase; the other half are pald for In the following month.

h$.$ During February, the company will purchase a new copy machine for $$1,500$ cash. During March, other equipment will be purchased

for cash at a cost of $$81,500.$

I. During January, the company will declare and pay $$45,000$ in cash dividends.

J$.$ The company must malntaln a minlmum cash balance of $$31,000.$ An open line of credit is avallable at a local bank for any

borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made

at the end of a month. Borrowings and repayments of princlpal must be in multiples of $$1,000.$ Interest Is pald only at the time of

payment of principal. The annual Interest rate Is $12\%.($Figure Interest on whole months, e$.$g$.,1/12,2/12.)$

Required:

Using the preceding data, complete the following statements and schedules for the first quarter:

$1.$ Schedule of expected cash collections.

$2-$a$.$ Inventory purchases budget.

$2-$b$.$ Schedule of cash disbursements for purchases.

$3.$ Schedule of cash disbursements for expenses.

$4.$ Cash budget.

$5.$ Prepare an income statement for the quarter ending March $31.$

$6.$ Prepare a balance sheet as of March $31.$