DC Products is a wholesale distributor of industrial cleaning products. The company treasurer has assembled the following information to assist in preparing a detailed cash budget to support the company$$s loan application for short$-$term financing with a local bank:

Budgeted sales and merchandise purchases for the year $2024,$ as well as actual sales and purchases for the last quarter of $2023,$ are as follows:

Sales Merchandise

Purchases

$2023$:

Fourth$-$quarter actual $ $260,000$ $ $163,800$

$2024$:

First$-$quarter estimated $390,000241,800$

Second$-$quarter estimated $520,000322,400$

Third$-$quarter estimated $650,000396,500$

Fourth$-$quarter estimated $260,000163,800$

The company normally collects $65\%$ of a quarter$$s sales before the quarter ends and another $33\%$ in the following quarter. The remainder are uncollectible. This pattern of collections is now being experienced in the $2023$ fourth$-$quarter actual data.

$80\%$ of a quarter$$s merchandise purchases are paid for within the quarter. The remainder are paid in the following quarter.

Operating expenses for the year $2024$ are budgeted quarterly at $$65,000$ plus $15\%$ of sales. Of the fixed amount, $$26,000$ each quarter is depreciation.

The company will pay $$13,000$ in dividends each quarter.

Equipment purchases of $$98,020$ will be made in the second quarter, and purchases of $$62,400$ will be made in the third quarter. These purchases will be for cash.

The cash account contained $$13,000$ at the end of $2023.$ The treasurer feels that this represents a minimum balance that must be maintained.

Any borrowing will take place at the beginning of a quarter, and any repayments will be made at the end of a quarter at an annual interest rate of $10\%.$ Interest is paid only when the principal is repaid. All borrowings and all repayments of the principal must be in round $$1,000$ amounts. Interest payments can be in any amount. $($Compute interest on whole months, e$.$g$.,1/12,2/12.)$

At present, the company has no loans outstanding.

Required:

$1.$ Prepare the following by quarter and in total for the year $2024$:

a$.$ A schedule of expected cash collections.

b$.$ A schedule of budgeted cash disbursements for merchandise purchases.

$2.$ Compute the expected cash payments for operating expenses, by quarter and in total, for the year $2024.$

$3.$ Prepare a cash budget, by quarter and in total, for the year $2024.$ In your budget, clearly show the quarter$($s$)$ in which borrowing will be necessary and the quarter$($s$)$ in which repayments can be made, as requested by the company$$s bank. $($Roundup "Borrowing" and "Repayments" answers to the nearest whole dollar amount. Any "Repayments", "Interest" and "Deficiency of cash" should be indicated by a minus sign.$)$

$4.$ Consider the cash balance at the end of the fourth quarter as calculated in Requirement $(3).$ Recalculate the ending balance if repayment of principal can be in round $$100$ amounts. $($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$