Former Corporation sells office supplies to government agencies. At the beginning of the current quarter, the company reports the following selected account balances: S 10,000 .. 210,000 88,000 Accounts receivable Current payables Former's management has made the following budget estimates regarding operations for the cur- rent quarter: Sales (estimated) $500,000 400,000 45,000 45,000 Debt service payment (estimated) Tax liability payment (estimated) Of Former's total costs and expenses, $20,000 is quarterly depreciation expense, and $20,000 represents the expiration of prepayments. The remaining $360,000 is to be financed with current payables. The company's ending prepayments balance is expected to be the same as its beginning prepayments balance. Its ending current payables balance is expected to be $22,000 more than its beginning balance. All of Former's sales are on account. Approximately 65 percent of its sales are collected in the quarter in which they are made. The remaining 35 percent are collected in the following quarter, Because all of the company's sales are made to government agencies, it experiences virtually no Former's minimum cash balance requirement is $10,000. Should the balance fall below this amount, management negotiates a short-term loan with a local bank. The company's debt ratio liabilities assets) is currently 80 percent