company's bank late in the current year seeking short-term financing, he was told that money was very tight and that any borrowing over the next year would have to be supported by a detalled statement of cash collections and disbursements. The treasurer also was. that it would be very helpful to the bank if borrowers would indicate the quarters in which they would be needing funds, as well as the amounts that would be needed, and the quarters in which repayments could be made. Because the treasurer is unsure as to the particular quarters in which bank financing will be needed, he has assembled the following information to assist in preparing a detailed cash budget a. Budgeted sales and merchandise purchases for next year, as well as actual sales and purchases for the last quarter of the current. year, are: b. All sales are on account. The company normally collects 65% of a quarter's sales before the quarter ends and another 33% in the following quarter. The remainder is uncollectible. This pattern of collections is now being experienced in the current year's fourthquarter actual data. c. Elghty percent of a quarter's merchandise purchases are paid for within the quarter. The remainder is paid for in the following quarter. d. Selling and administrative expenses for next year are budgeted ot $50,000 per quarter plus 15% of sales. Or the fixed amount, $20,000 each quarter is depreciation. e. The company will pay $10,000 in dividends each quarter. 1. Land purchases of $75,000 will be made in the second quarter, and purchases of $48,000 will be made in the third quarter. These purchases will be for cash. g. The Cash account contained $10,000 at the end of the current year. The treasurer feeis that this represents a minimum batance that must be maintained h. The company's bank allows borrowing in increments of $1,000 at the beginning of each quarter, up to a total loan balance of $100,000. The interest rate on these loans is 2.5% per quarter and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the yeat. 1. At present, the company has no loans outstanding Requlred: 1. Calculate the expected cash collections by quarter and in total for next year 2. Calculate the expected cash disbursements for merchandise purchases by quarter and in fotal for neat yeas, 3. Calculate the expected cash disbursements for sefling and administrative expenses, by quarter and in total for nent yas. 4. Prepare a cash budget by quarter and in total foc next year