Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated 1. Projected sales for December of 20x0 are $400,000. Credit sales typically are 60 percent of total sales. Intercoastal's credit experience indicates that 30 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month 2. Intercoastal's cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 50 percent of each month's purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month's projected cost of goods sold 3. Hanson has estimated that Intercoastal's other monthly expenses will be as follows Sales salaries Advertising and promotion Administrative salaries Depreciation Interest on bonds Property taxes 19,000 16,000 19,000 15,000 2,100 1,200 In addition, sales commissions run at the rate of 3 percent of sales 3. Purchases budget: 20x0 20x1 December January February March First Quarter Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less: Expected beginning inventory Purchases 0 S 0 S