Freda$$s Phones Inc. is a mobile phone retailer. The company is planning its cash needs for the month of January $2023.$

The statement of financial position showed the following at its fiscal year$-$end, December $31,2022.$

Assets

Current

Cash $$20,000$

Accounts receivable $330,000$

Inventory $120,000$

$470,000$

PPE, net $4,000,000$

$$4,470,000$

Liabilities

Current

Operating loan $$100,000$

Accounts payable $140,000$

$240,000$

Non$-$current borrowings $3,000,000$

$3,240,000$

Shareholders$$ Equity

Common shares $120,000$

Retained earnings $1,110,000$

$1,230,000$

$$4,470,000$

$$

Other information:

a$.$ Cash collection

i$.$ November credit sales $$0$

ii$.$ December credit sales $$550,000$

iii. $\%$ cash sales each month $20\%$

iv$.\%$ credit sales collected in same month $40\%$

v$.\%$ credit sales collect in next month $60\%$

vi$.\%$ credit sales collected in second month $0\%$

b$.$ January total sales $$500,000$

c$.$ Inventory information

i$.$ February total sales $$450,000$

ii$.$ Gross profit ratio January $60\%$

iii. Gross profit ratio February $60\%$

iv$.\%$ purchases paid in cash same month $20\%$

v$.\%$ inventory on hand needed for next month$$s sales $60\%$

d$.$ Accounts payable at Dec. $31$ all relate to inventory purchases and will be paid in full in January

e$.$ Variable expenses as $\%$ of total sales, paid each month $30\%$

f$.$ Fixed expenses

i$.$ Depreciation, including any January budgeted PPE purchases $$40,000$

ii$.$ Other fixed operating expenses, paid each month $$30,000$

g$.$ Interest rate per month $1\%$

Interest is paid monthly on opening balances of the operating loan and non$-$current debt.

h$.$ Corporate income tax rate. $25\%$

Income taxes are accrued at the end of the fiscal year.

i$.$ Monthly cash dividends paid to shareholders $$5,000$

j$.$ Budgeted PPE purchases for January $$15,000$

k$.$ January repayments of principal on non$-$current debt $$25,000$

l$.$ Desired minimum cash balance at end of January $$20,000$

m$.$ Maximum operating loan balance at end of January is $$200,000$

n$.$ Any excess cash will be used to pay down the operating loan.

o$.$

Any cash not able to be provided by the operating loan will be raised by issuing common shares.

$$

Required:

$1.$Using a format like the budget worksheet on the following page, record the above information.

$2.$ Prepare a statement of financial position at January $31,2023$ and budgeted income statement, statement of changes in equity, and statement of cash flows for the month ended January $31,2023.$ Show all calculations. For SCF purposes, assume the operating loan is part of cash and cash equivalents.

$3.$ Apprise management of budgeted January operating loan needs and the dollar amount of any shares that may need to be issued.