Carter Company is a bookstore that prepares its master budget on a quarterly basis. The following data has been assembled to assist in preparation of the master budget for the first quarter:

1. As of December 31 (the end of the prior quarter), the companys general ledger showed the following account balances:

Debit Credit

Cash 48,000

Accounts Receivable 224,000

Inventory 60,000

Building & Equipment 370,000

(net of Accumulated Depr)

Accounts Payable 93,000

Capital shares 500,000

Retained Earnings 109,000

Totals $ 702,000 $ 702,000

2. Actual sales for December and budgeted sales for the next four months are as follows;

December (actual) $ 280,000

January 400,000

February 600,000

March 300,000

April 200,000

3. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31^st are a result of December credit sales.
4. The companys gross margin is 40% of sales.
5. Monthly expenses are budgeted as follows:

- salaries and wages $ 27,000 per month

- advertising $ 70,000 per month

- shipping costs are 5% of sales

- depreciation is $ 14,000 per month

- other expenses are 3% of sales

f. At the end of each month, inventory is to be on hand equal to 25% of the following months sales needs, stated at cost.

g. One-half of a months inventory purchases is paid for in the month of purchase; the other half is paid for in the following month.

h. During February, the company will purchase a new copy machine for $ 1,700 cash. During March, other equipment will be purchased for cash at a cost of $ 84,500.

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

j. The company must maintain a minimum cash balance of $ 30,000. An open line of credit is available 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. Borrowing and repayments of principal must be in multiples of $ 1,000. Interest is paid only at the time of repayment of principal. The annual interest rate is 12%. (Figure out interest on whole months, example, 1/12, 2/12, etc.)

1. Create a Schedule of cash disbursements for operating expenses