Intercoastal's president, Davies$-$Lowry, has indicated that the firm should invest $$105,000$ in an automated inventoryhandling system to control the movement of inventory in the firm's warehouse just after the new year begins. These equipment purchases will be financed primarily from the firm's cash and marketable securities$.$ However, Davies$-$Lowry believes that Intercoastal needs to keep a minimum cash balance of $$40,000.$ If necessary, the remainder of the equipment purchases will be financed using short$-$term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short$-$term interest rates will be $10$ percent per year at the time of the equipment purchases. If a loan is necessary, Davies$-$Lowry has decided it should be paid off by the end of the first quarter if possible.

Intercoastal's board of directors has indicated an intention to declare and pay dividends of $$75,000$ on the last day of each quarter.

The interest on any short$-$term borrowing will be paid when the loan is repaid. Interest on Intercoastal's bonds is paid semiannually on January $31$ and July $31$ for the preceding six$-$month period.

Property taxes are paid semiannually on February $28$ and August $31$ for the preceding six$-$month period.

Required:

Prepare Intercoastal Electronics Company's master budget for the first quarter of $201$ by completing the following schedules and statements.

Problem $9-44$ Part $5$

$5.$ Complete the first three lines of the summary cash budget. Then do the analysis of short$-$term financing needs in requirement $6.$ Then finish requirement $5.$