Given the information that follows, prepare a cash budget for the XYZ Store for the first six months of 2016. All prices and costs remain constant. Sales are 88% for credit and 12% for cash. With respect to credit sales, 55% are collected in the month after the sale, 30% in the second month, and 25% in the third. Bad-debt losses are insignificant. Sales, actual and estimated, are (* for actual sales): October 2015 $300,000* March 2016 $240,000 November 2015 350,000* April 2016 340,000 December 2015 270,000* May 2016 290,000 January 2016 230,000 June 2016 220,000 February 2016 250,000 July 2016 320,000 Merchandises are purchased one month before the anticipated sales at 74% (COGS). Assume all purchases arrived in the same month of ordering, and the company will pay the purchase exactly 1 month after placing the order. Wages and salaries are: January 2016 $40,000 April 2016 $50,000 February 2016 45,000 May 2016 65,000 March 2016 55,000 June 2016 55,000 Rent is $6,000 a month. Interest of $8,500 is due on the last day of each calendar quarter, and no quarterly cash dividends are planned. A tax prepayment of $60,000 for 2016 income is due in April. A capital investment of $60,000 is planned in June, to be paid for then. The company has a cash balance of $ 90,000 at December 31, 2015, which is the minimum desired level for cash. Funds can be borrowed in multiples of $10,000. (Ignore interest on such borrowings.) Par (b) . Use the cash budget worked out in Part (a) and the following additional information to prepare a forecast income statement for the first half of 2016 for the XYZ Store. (Note that the store maintains a safety stock of inventory.) Inventory at 12/31/15 was $220,000. Depreciation is taken on a straight-line basis on $250,000 of assets with an average remaining life of 10 years and no salvage value. The tax rate is 34 percent. Part (c). Given the following information and that contained in Parts (a) and (b), construct a forecast balance sheet as of June 30, 2016, for the XYZ Store. XYZ Store balance sheet at December 31, 2015 XYZ Store balance sheet at December 31, 2015 ASSETS LIABILITIES AND EQUITY Cash $90,000 Accounts payable $140,000 Accounts receivable 427,500 Bonds 500,000 Inventory 220,000 Common stock and retained earnings Fixed assets, net 250,000 347,500 $987,500 $987,500