Following is selected information relating to the operations of Pocketchange Company, a tile distributor. September 30, 2012 - Trial Balance information Actual and budgeted sales data: Gross profit is25% of sales (or 75% Cost of Goods Sold%). Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at September 30 are a result of the September's credit sales. At the end of each month, inventory on hand is to be equal to 80% of the following month's sales needs, stated at cost. One-half of a month's inventory purchases is paid in the month of purchase; the other half is paid in the following month. the accounts payable at September 30 are a result of September purchases of inventory. Monthly expenses are as follows; salaries and wages, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $1,250 per month (includes depreciation on new assets). Equipment costing $6,500 will be purchased for cash in the October and another $3,000 in November. The company must maintain a minimum cash balance of $5,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month; borrowing and repayments must be made in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of repayment of principles; figure interest on the whole month (2/12, 3/12, and so forth). Any unpaid interest is accrued at the end of quarter. Following is selected information relating to the operations of Pocketchange Company, a tile distributor. September 30, 2012 - Trial Balance information Actual and budgeted sales data: Gross profit is25% of sales (or 75% Cost of Goods Sold%). Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at September 30 are a result of the September's credit sales. At the end of each month, inventory on hand is to be equal to 80% of the following month's sales needs, stated at cost. One-half of a month's inventory purchases is paid in the month of purchase; the other half is paid in the following month. the accounts payable at September 30 are a result of September purchases of inventory. Monthly expenses are as follows; salaries and wages, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $1,250 per month (includes depreciation on new assets). Equipment costing $6,500 will be purchased for cash in the October and another $3,000 in November. The company must maintain a minimum cash balance of $5,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month; borrowing and repayments must be made in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of repayment of principles; figure interest on the whole month (2/12, 3/12, and so forth). Any unpaid interest is accrued at the end of quarter