Rancho, Inc. forecasts the following sales for the second quarter of 2020, as well as actual March sales:

March (actual)	April	May	June	2nd Q. Total
$3,000	$4,000	$5,000	$6,000	$15,000

In addition:

• The company makes 60% cash sales and 40% credit sales.
• It collects all credit sales in the month after the sale.
• The firm budgets $4,400 for monthly operating expenses. That amount includes $400 for depreciation.
• The firm pays all of its cash-based expenses in the month incurred.
• Rancho, Inc. had $100 of cash at March 31, 2020, and it must maintain a minimum $500 cash balance at the end of every month to ensure liquidity.
• The company has a line of credit with its bank that allows borrowing in $100 increments at 12% interest. All borrowing takes place at the beginning of the month in which the company requires cash.
• The company must repay principal in hundred dollar increments.
• The credit facility requires Rancho, Inc. to repay all accrued interest to date whenever it repays principal.
• Principal repayments and interest payments occur at the end of a month (funds permitting).

1. Record the above transactions in Whitelands journal below.

Date	Accounts	Debit	Credit
1/1/20
1/3/20
1/10/20
1/21/20
1/23/20
1/30/20
1/31/20
1/31/20

b. Present Whitelands income statement through gross profit for January 2020.

Sales revenue
Cost of goods sold
Gross profit

c. Report accounts receivable, inventory, and accounts payable on Whitelands January 31, 2020 balance sheet.

Current Assets:
Cash
Accounts receivable, gross
Less: allowance for uncollected accounts
Accounts receivable, net
Inventory
Current Liabilities:
Accounts payable