Eric and Heather agree that there also is a need for better forecasting regarding the company's cash inflows and outflows. After a series of questions, you determined that (1) the company had not prepared a cash budget for several quarters and (2) is not up to date on its payables and receivables. You are going to prepare a forecasted income statement and a forecasted cash budget for the fourth quarter. Pertinent information needed has been collected and is outlined below. Pertinent Information: The business manager/accountant and Heather provided projections for the 1" quarter 2021 (January through March 2021) and other information outlined below: 1. Total sales 4th quarter 2020: 58,500 10-oz bottles; Sales price is $8/bottle 2. Total Sales for the 1st quarter 2021 are projected to increase 5% above the 4" quarter 2020 total sales due to an aggressive marketing program that began December 1, 2020. Total quarter sales per month are expected to be realized as follows: 40% in January, 35% in February, and 25% in March. The sales budgets expressed in sales dollars and in the number the number of bottles sold are as follows: PROJECTED SALES REVENUE SALES SALES: PRICE X QUANTITY Number of Bottles Sold Number of Bottles Sold Oct a. Cash sales... b. Credit sales. $126,945 $126,945 Oct 15,356 Nov $177,723 $177,723 Nov 21,499 Dec $203,112 $203,112 Dec 24,570 TOTAL QTR 3. Monthly Sales are classified as follows and realized in corresponding percentage: 30% of total sales 70% of total sales $507,780 TOTAL QTR $507,780 61,425 4. Monthly credit sales are collected as follows and in the corresponding proportion: a. Collected in the month of the sale, 50% b. Collected one month after the sale month, 30% c. Collected the second month after the sale month, 20% 5. Cost Classifications based on 4th quarter information: Raw Materials Used in Manufacturing (See corrected COGS Schedule in Part 1, Required #1) $ Costs Direct Labor Factory Overhead: Rent-Factory Indirect Labor Insurance-Factory (66 2/3%) Utility-Factory (75%) Depreciation-factory building Advertising expense Selling & Administrative Wages and Salaries Utility-Selling & Administrative (25%) Insurance-Administrative (33 1/3%) Depreciation-Administrative PROJECTED RAW MATERIAL PURCHASES Actual Costs on 4th Quarter Income Statement 114,000 General Administrative NEEDED FOR SALES DESIRED ENDING LESS: BEGINNING PURCHASES Oct $34,503 8,626 (40,800) $2,329 Variable Costs Nov $48,304 12,076 (8,626) $51,755 ? 9. Additional monthly obligation paid in cash include: 6. All factory overhead and administrative expenses (except depreciation) are paid in cash in the month the cost is incurred. 7. Direct labor is paid at the end of the month 16,800 8. Raw material purchases are paid as follows: 50% in the month of the purchase, 30% the month after the purchase, and 20% in the second month following the purchase. The raw materials budget is as follows: a. Property taxes, due February 27, 2021: $2,790 b. Employee payroll taxes due March 15, 2021: $900. 5,400 18,000 1,680 Fixed Costs Dec $36,000 $55,205 13,801 (12,076) $56,930 3,630 1,800 18,200 64,000 67,000 720 2,970 27,000 TOTAL QTR $138,012 $111,013