Frost Corporation prepares its master budget on a quarterly basis. The following data have been assembled to assist in the preparation of the master budget for the fourth quarter of 2019:

The company's gross profit rate is 35 percent of sales.

Actual sales for September and budgeted sales for the next four months are as follows:

September 2019 $120,000

October 2019 140,000

November 2019 160,000

December 2019 110,000

January 2020 90,000

Sales are 30 percent for cash and the rest on account. All sales on account are collected the month following sale. The accounts receivable on September 30 are a result of September credit sales.

At the end of each month, inventory is to be on hand equal to 30 percent of the following month's sales needs, stated at cost.

Forty-five percent of a month's inventory purchases are paid for in the month of purchase; the rest is paid for in the following month.

Monthly expenses are budgeted as follows: property taxes, $6,000 per month; salaries and wages, $13,000 per month; depreciation, $11,000 per month; advertising, 4 percent of sales; utilities, $4,000 per month; other expenses, 3 percent of sales

During October and December, the company will declare and pay $15,000 and $20,000 in cash dividends, respectively. Assume no dividends will be paid in November.

During November, the company will purchase a new computer for $8,000 in cash. During December, other equipment will be purchased for cash at a cost of $12,000. Assume there will be no equipment purchases in October 2019.

As of September 30, 2019 (the end of the prior quarter), the company's general ledger showed the following account balances:

Debits Credits

Cash $15,000 Accounts Receivable 50,000

Inventory 35,000

Plant and Equip (net) 125,000

Accounts Payable $31,000

Short-term Notes Payable 20,000

Capital Stock 110,000

Retained earnings _______ 64,000

$225,000 $225,000

The company must maintain a minimum cash balance of $12,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made at the end. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid at the end of each month. The interest rate is 12 percent per annum. (Figure interest in whole months, e.g., 1/12, 2/12.)