Golden State Company has applied at a local bank for a short-term loan of $150,000 starting on October 1, 2019. The bank's loan officer has requested a cash budget from the company for the quarter ending December 31, 2019. The following information is needed to prepare the cash budget:

Sales: $600,000

Purchases: 350,000

Salaries and wages to be paid: 125,000

Rent payments: 7,000

Supplies (payments for): 4,500

Insurance payments: 1,500

Other cash payments: 22,000

A cash balance of $24,000 is planned for October 1 (beginning of quarter).Accounts receivable are expected to be $48,000 on October 1.All of these accounts will be collected in the quarter ending December 31.In general, Sales are collected as follows: 90% in the quarter of the sale and 10% in the quarter after the sale.

Accounts Payable are planned to be $480,000 at October 1 and will be paid during the quarter ended December 31.All purchases are paid for in the quarter after the purchase.

a.How to prepare a cash budget for the quarter ending December 31, 2019. Assume that the $150,000 loan will be made on October 1 and will be repaid with interest at 10% on December 31.

(Use the format for the Cash Budget in the comprehensive example posted to Canvas. Don't forget the include the loan proceeds and the interest.)

b.If the company desires a minimum cash balance of $18,000, will the company be able to repay the loan as planned on December 31?