Jameson Company, a liquid specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the second quarter: a. As of March 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable S 8,500 24,000 45,600 121,200 Buildings and equipment (net) Accounts payable Common stock Retained earnings 27,300 150,000 199,300 s 199,300 The gross margin is 25% of sales b. Actual sales for March and budgeted sales for the next four months are as follows: March actual April May $76,000 $81,000 $106,000 $57,000 July Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales c. d Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. Monthly expenses are budgeted as follows: rent, S3.300 per month. commissions, 12% of sales; other expenses, 6% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be S909 per month. One-half of a month's inventory purchases are paid for in the month of purchase; the other half is paid in the following month. c. an he olowing g. Equipment costing $2,500 wll be purchased for cash in April Management wants to maintain a minimum cash balance of $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of cach month, up to a total loan balance of S20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter