Powell and Sons, a home furnishings store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the first quarter: 1.) As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Debits Credits Cash $51,200 Accounts Receivable 61,800 Inventory 82,600 Property and Equipment (net) 80,600 Accounts Payable $101,000 Capital Stock 45,300 Retained Earnings 129,900 $276,200 $276,200 2) Actual sales for December and budgeted sales for the next four months are as follows: December (actual) $206,000 January $236,000 February $287,000 March $296,000 April $221,000 a. Sales are 70% for cash and 30% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. b. The company's gross profit margin is 35% of sales. c. Monthly expenses are budgeted as follows: salaries and wages, $30,000 per month: advertising, $12,000 per month; shipping, 5% of sales; other expense, 10% of sales. Depreciation for the quarter will be $9,000. d. At the end of each month, inventory is to be on hand equal to 60% of the following month's sales needs, stated at cost. e. 30% of a month's inventory purchases are paid for in the month of purchase; the remainder is paid for in the following month. f. During February, the company will purchase land for $8,000 cash. During March, land will be purchased for cash at a cost of $4,000. g. During January, the company will declare and pay $50,000 in cash dividends. h. The company must maintain a minimum cash balance of $5,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing and repayments are made at the beginning of a month in increments of $1,000. The company pays interest on the prior months line of credit ending balance at a monthly interest rate of the previous months outstanding balance. Interest is paid regardless whether we are borrowing more or repaying principal. The annual interest rate is 12%