Hastings Co has approached its bank in late September with a request for a $300,00090-day loan, to meet its working capital requirements. Inventories peak in October, and the company treasurer expects that Hastings Co will be in a position to repay the loan in full by the end of the 90 -day period. In order to approve the loan application, the bank has first requested the company to provide a 3-month cash budget for October, November, and December. If the loan is granted, it will be given in October and repaid in December and have an annualized interest rate of 16% which accrues quarterly but will be paid at the time of repayment. The following additional data are available to assist in preparing the required information for the bank loan: 1. The loan will be granted on October 1 and the cash balance on this date is $260,000. 2. Of the accounts receivable at September 30, the company expects to collect $1,291,840 in October and $547,200 in November. Some receivables will become uncollectible. 3. Past collection experience indicates that 80% of sales are on credit and the remainder are paid in cash. Credit customers paying within one month are given a discount of 1.5%. Credit customers normally pay within the following time frame: After 1 month following the sale 60% of credit sales have been paid After 2 months following the sale 98% of credit sales have been paid There is an expectation that 2% of credit sales will become bad debts. 4. Merchandise purchases are paid in full in the month after purchase. September purchases were $1,080,000. 5. Hastings Co has planned to purchase new equipment costing $200,000 in October. The Finance Director has indicated that with the new equipment purchase, the company can retire old equipment with a net book value of $18,000. The company has been able to contract with a dealer to purchase this old equipment for $15,000 in November. 6. The following are budgeted sales and expenses for the 3-month loan period. Wages and selling and administrative expenses include depreciation of office equipment and fixtures as well as any gains or losses on the disposal of fixed assets. Wages and selling and administrative expenses are paid in the month incurred. 7. Cost of goods sold consistently has averaged about 65 percent of sales. Inventory at September 30 was $980,000. Required a. Prepare a schedule of expected cash collections for the months of October, November, and December, and for the three months in total. (8 marks) b. Prepare a cash budget, by month and in total, for the 3-month period. (11 marks) c. Prepare the working capital position of Hastings Co. at December 31 assuming the loan will be repaid at the agreed upon date. Use headings Current Assets and Current Liabilities. (6 marks) d. Using your results from part (c) above, discuss the impact of Hasting Co.'s inventory management, accounts receivable collection and accounts payable policies on the working capital needs of the company. Include a recommendation on efficient working capital management