Nova Company prepares its master budget on a quarterly basis. The following data have been assembled to assist in the preparation of the budget for the first quarter.

Income:
▪ Jan 1st Common (Ordinary) Share Capital invested in the new business, $38,000.
▪ Forecasted sales:
Cash sales each month Credit sales (all on 1-month credit)
Jan $ 28,450 Jan $ 43,150
Feb $ 32,000 Feb $ 42,000
Mar $ 34,000 Mar $ 48,000

Expenditure:
▪ Forecasted purchases
Cash purchases each month Credit purchases (all on 1-month credit)
Jan $ 45,200 Jan $ 14,000
Feb $ 37,800 Feb $ 13,800
Mar $ 42,500 Mar $11,000
▪ Monthly expenses are as follows: commission $12,000; rent $1,800; other expenses
(excluding depreciation) $2,000. These expenses are paid monthly.
▪ Equipment will be acquired for cash: $3,000 in January and $7,000 in February.
▪ Depreciation is $2,400 on new assets purchased for the quarter.
▪ Cash dividend of $1,000 will be paid in March
▪ Ending inventory is forecasted to be $7,700.

Note:
*The company will maintain a minimum cash balance of $3,000 at the end of each month. It can borrow money on notes payable of $1,000 each, at an annual interest rate of 12%. Management borrows no more than the amount needed to maintain the $3,000 minimum.
*Borrowing, repayments of principal, and payment of interest all take place at the end of the month
*Monthly interest on the unpaid principal, will start from February.
* The company has agreed to pay back the short-term loan in monthly installments of $400, also commencing from August.

REQUIRED
Prepare a forecasted cash budget, a forecasted income statement, and a forecasted balance sheet for the first quarter.