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Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company's bank late in the current year seeking short-term financing he was told that money was very tight and that any borrowing over the next year would have to be supported by a detaled statement of cash collections and disbursements. The treasurer also was told. that it would be very helpful to the bank if borrawers would indicate the quarters in which they would be needing funds, as well as the amounts that would be needed, and the quatters in which repayments could be made. Because the treasure is unsure as to the particular quarters in which bank financing will be needed, he has assembled the foliowing information to assist in preparing a detailed cash budget a. Budgeted sales and merchandise purchases for next year as well as actual sales and purchases for the last quarter of the cuitrent year, are: b. All sales are on account the company normally collects 65% of a quarter's sales before the quarec ends and anothet 336 in the followng quartet. The temainder is uncollectible. This pattern of coliections is now being experienced in the current year's faurth quarter actual data C Eighy percent of a quarter's merchandise purchases are paid for within the quarter The rernainder it paid for in the failowing quarter. d Seling and administatwe expenses for next yeat are budgeted at $50.000 per quanter plus 158 of ales of the fixed anount: $20,000 each quarter is depreciation e. The compony will pay $10,000 in dividends each quarter. I Land purchases of 375,000 wil be made in the second quarter and purchases of 348,000 will be made in the ihird quarter. These purchases will be for cash 0. The Carh account contained $10.000 at the end of the curtent yeat The Heagurer feels that this represient a minimim balance that mult be maintaned h The company's bank allows borroming in increments of $1000 at the beginning of each quartes up to a fotal loan balance of $100,000. The interest rate on these ioans is 258 per quarter and for amplic cy we wil sisume hat interen is not compounded the company would. os fat an i is able, repay the loan plus accumulated inereit at the end at the year At preserit, the company haz no loans outsanding