Lipton Auto Parts, a family-owned auto parts store, began January with $10,200 cash. Management forecasts that collections from credit customers will be $11,100 in January and $15,200 in February. The store is scheduled to receive $7,000 cash on a business note receivable in January. Projected cash payments include inventory purchases ($13,900 in January and $14,800 in February) and selling and administrative expenses ($2,900 each month). (Click the icon to view additional information about Lipton Auto Parts.) Read the requirements. 1. Prepare Lipton Auto Parts' cash budget for January and February. 2. How much cash will Lipton Auto Parts borrow in February if collections from customers that month total $14,200 instead of $15,200? Lipton Auto Parts' bank requires a $10,000 minimum balance in the store's checking account. At the end of any month when the account balance falls below $10,000, the bank automatically extends credit to the store in multiples of $1,000. Lipton Auto Parts borrows as little as possible and pays back loans in quarterly installments of $3,000, plus 3% APR interest on the entire unpaid principal. The first payment occurs three months after the loan. January February $ 10,200 10200 Beginning cash balance Cash receipts from customers 15,200 11,100 7,000 Cash receipt on note receivable 0 $ 28,300 25400 Cash available Cash payments: Purchases of inventory -13900 14,800 2,900 Selling and administrative expenses -2900 -16800 17,700 Total cash payments Ending cash balance before financing $ $ 11,500 7700 10200 Minimum cash balance desired Less: 10200 1300 -2500 Projected cash excess (deficiency) Total effects of financing 0 1,000 $ 11,500 8700 Ending cash balance