Question 1 Poly Plastic Inc deals in plastic urns. The following data has been compiled in preparation to prepare the necessary budgets for the company. As at 1 January 2018, opening balance for cash is $45,000, accounts payable is $150,000, accounts receivable is $25,000, nished goods inventory is 300 units and raw material inventory is 5,500 square meters. Expenses and paid were $25,000 rent for the quarter and a repayment of a loan of $30,000 per quarter plus monthly expenses of $13,000 in wages, $5,000 in utilities and $7,000 for payment of interest on borrowings. During the rst quarter, 60% of material purchases were paid within the quarter of purchase while the balance was paid in the next immediate quarter. The predicted sales of the following quarter will determine the required finished goods inventory of a quarter. Management decided to set it at 20% of predicted sales. In the case of direct materials, the required ending inventory balance was set at 25% of the production requirements of the following quarter. 3 square meters of plastic is needed, at a purchase price of $25! square meter, in order to produce an urn. The following are forecast data: 1st quarter of 2018 9,000 urns to be sold 2nd quarter of 2018 "L500 urns to be sold 3rd quarter of 2018 8,200 urns to be sold 4th quarter of 2018 10,000 urns to be sold