On December 1, 20X1, the Luan Wholesale Co. is attempting to project cash receipts and disbursements through January 31, 20X2. On this latter date, a note will be payable in the amount of $107,000. This amount was borrowed in September to carry the company through the seasonal peak in November and December.

Selected general ledger balances on December 1 are as follows:

Cash	$ 30,000
Inventory Accounts payable	111,800	139,000

Sales terms call for a 3% discount if payment is made within the first 10 days of the month after sale, with the balance due by the end of the month after sale. Experience has shown that 50% of the billings will be collected within the discount period, 30% by the end of the month after purchase, and 15% in the following month. The remaining 5% will be uncollectible. There are no cash sales.

The average selling price of the companys product is $170 per unit. Actual and projected sales are as follows:

October actual	287,000
November actual	629,000
December estimated	561,000
January estimated	612,000
February estimated	510,000
Total estimated for the year	$3,218,750

All purchases are payable within 15 days. Approximately 60% of the purchase in a month are paid that month, and the rest the following month. The average unit purchase cost is $130.Target ending inventories are 570 units plus 20% of the next month's unit sales.

Total budgeted marketing, distribution, and customer service costs for the year are $670,000. Of this amount, $155,000 are considered fixed (and include depreciation of 43,400). The remainder varies with sales. Both fixed and variable marketing, distribution, and customer service costs are paid as incurred.

Required:

1. Prepare a cash budget for December of 20X1, and January of 20 X2. Supply supporting schedules for collections of receivables; payments for merchandise purchase; and marketing, distribution, and customer service costs.

Cash budget	Dec.	Jan.
Cash, beginning balance	30000	$4,835
Add: Cash collection	503835	559470
Total Cash available	533835	$564,305
Less: Purchase budget	429940	465400
Variable costs	$89,760	$97,920
Fixed costs	9300	9300
Cash, ending balance	$4,835	($8,315)

2. Would the company be able to repay the $100,000 note by the end of January? What actions can it take?

PLEASE ANSWER QUESTION 2, THANK YOU.