estion 1 - Katchen Company- Master Bud The following information has been assembled to assist in preparing a master budget for Katchen Company for the first quarter of 2019, January through March. At December 31, 2018, the company's general ledger account balances were: 4,500 31,000 Cash Inventory 15,320 Buildings and Equipment Accounts Payable 121,500 42,400 107,000 22,920 Capital Stock Retained Earnings a. The gross margin is 30% of sales. b. Actual sales for December 2018, and budgeted sales for the first four months of 2019 are as follows: December 2018 January $80,000 February March April $92,000 $99,000 97,000 85,000 40% of sales are for cash. All payments on credit sales are collected in the month following the sale. c. d. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. e. One-quarter of each month's inventory purchases is paid for in the month of purchase; the balance due is paid for in the following month. f. Monthly cash expenses include: depreciation), 8% of sales. commissions, $6,000; rent, $1,600; other expenses (excluding h. Equipment is scheduled to be purchased for cash in January ($3,000) and in February ($8,000) g. Depreciation is calculated quarterly, in the last month of each quarter. For Q1, 2019, total depreciation was $6,400 and includes depreciation on new assets acquired during the quarter i. Management would like to maintain a minimum cash balance of $5,000. The company has an agreement with a local bank that allows it to borrow necessary amounts at the beginning of each month, up to a total loan balance of $30,000. The interest rate is 2% per month. The company will, as far as it is able, repay the loan at the end of each month and must pay interest each month on the total loan balance outstanding for that month. abel r with the numbers below Re rt r answe Complete a set of budgets, including 1. Schedule of expected cash collections. 2. Merchandise purchase budget. 3. Schedule of expected cash disbursements for merchandise purchases. 4. Schedule of total cash disbursements. S. Cash budget