Janus Products, Inc. is a merchandising company that sells binders, paper, and other school supplies. The company is planning its cash needs for the third quarter. In the past, Janus Products has had to borrow money during the third quarter to support peak sales of back-to-school materials, which occur during August. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for July to October are as follows JulyAugust September October 43,000 $73,000 $53,000 $48,000 25,200 43,200 31,200 28,200 Sales Cost of goods sold Gross margin Selling and administrative expenses: 17,800 29,800 21,800 19,800 12.300 7,500 8,800 6,400 7,600 Selling expense Administrative expense 5,800 6.200 Total selling and administrative expenses 13,900 19,800 15200 13,800 3,900 10,000 S 6,600 6,000 Net operaling income includes $2,150 depreciation each month b. Sales are 20% for cash and 80% on credit. c. Credit sales are collected aver a three-month period, with 10% colected in the month of sale, 70% in the month following sale, and 20% in the second month following sale. May sales totaled $33,000, and June sales totalled $39,000 Inventory purchases are pad for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% are paid in the folowing month. Accounts payable for inventory purchases at June 30 total $13.200 d e. The company maintains its endng inventory levels at 75% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $19,500 1. Land costing $4,650 will be purchased in July g. Dividends of $1,150 will be declared and paid in September. h. The cash balance on June 30 is $8,300; the company must maintain a cash balance of at least this amount at he end of each month L The company has an agreemant with a local bank that allows it to borrow in increments of $1,000 at the beginning of each month, up to a total loa n balance of $40,000. 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