Eugene Brewing Company is budgeting for the next year. The following is the company's beginning balance sheet: Assets Cash Accounts receivable Inventory Total current assets Fixed assets Accumulated depreciation. Total Fixed Assets Net Total Assets Hops Yeast Sugar Bottles Hops Yeast Sugar Bottles EUGENE BREWING COMPANY BALANCE SHEET 12/31/2018 Material S 120,000 130,000 160,000 $ 410,000 The company expects to collect the beginning balance of accounts receivable in January. In general, 45% of the company's sales are on a cash basis. Of the credit sales, 40% are paid in the following month, and 60% are paid in the second month after the sale. Material 900,000 (300,000) 600,000 $1.010,000 The accounts payable at the beginning of the year must be paid in January. All materials are purchased on credit and paid for in the following month. The long-term debt has an annual interest rate of 12%. Interest payments of 1% of the principal are made each month. The long-term debt is not due for another five years. Eugene Brewing Company makes two different types of beer, an ale and a porter. The ale is a lighter beer that requires fewer ingredients than does the darker and heavier porter. The input requirements for a case of beer for each type of beer is as follow: Liabilities and Equities Accounts payable Long-term debt Total liabilities Common stock at par Additional paid-in Retained earnings Total Equity Total liabilities and equities For Making Ale Quantity per case 5 lb. 1 oz. 0.5 lb. 24 For Making Porter Quantity per case 10 lb. 1 oz. 0.8 lb. 24 $ 230,000 370,000 Cost $0.50/lb. 0.20/oz. 0.40/1b.. 0.20/bottle $ 600,000 $ 150,000 150,000 110,000 410,000 $1.010,000 Cost $0.50/lb. 0.20/oz. 0.40/lb. 0.20/bottle The labor to make a case of beer is the same for each type of beer, 0.20 hours at $20/hour. Labor is paid in the month earned. Monthly overhead expenses are paid in the month incurred and expected to be as follows: WALL 6/2004 Ale sells for $25 per case, and porter sells for $30 per case. Estimated sales (in cases) for Eugene Brewing to be as follows: a. Month b. Electricity Administrative Indirect labor Rent Depreciation January February March April C. Cases Ale $ 75,000 115,000 17,000 19,000 25,000 24,000 65,000 70,000 80,000 The beginning inventory includes 13,000 cases of ale and 12,000 cases of porter. The company prefers to have inventory at the end of each month equal to the expected sales in the next month. Eugene Brewing uses a first-in, first-out (FIFO) method of costing inventory. The company must buy a new bottling machine for $480,000 at the end of January. Estimate cash flows in each of the months. Does the company need to borrow money in any of the months? Make a balance sheet as of the end of March and an income statement for the first three months. Assume that the company borrows cash at an interest rate of 1% per month to make up any shortage of cash. Cases Porter 20,000 26,000 28,000 30,000