Recently Kristina Freeloader the owner of Prorogue Inc. has been looking at her books and realizes she needs help. Kristina has hired a recent graduate at a local university in accounting and wants Fillipe Champless to prepare a cash budget for January. After examining the company's records, you find the following: a) Cash balance on June 1st is $13,450. b) Actual sales for November and December are as follows: November December Cash sales $35,000 $45,000 Credit sales $55,000 $85,000 Total sales $90,000 $130,000 c) Credit sales are collected over a 3-month period as follows: i) 50% in the month of sale ii) 30% in the second month iii) 15% in the third month The sales collected in the third month are subject to a 1.25% late fee, but only half of the affected customers pay the late fee and the owner does not think it is worthwhile to try to collect from the other half. The remaining sales are uncollectible. d) Inventory purchases average 60% of a month's total sales. Of these purchases, 40% are paid in the month of purchase. The remaining 60% are paid for in the following month. e) Salaries and wages are $54,700 a month including a salary of $15,000 paid to the owner. f) Rent is $3,200 per month. g) Taxes to be paid in June are $3,500. The owner also tells you that he expects cash sales of $32,000 and credit sales of $76,000 for June. No minimum cash balance is required. The owner does not have any short-term loans. Required: 1. Prepare a cash collection budget, cash payment budget and a cash budget for June (16 marks) 2. Does Prorogue Inc. have sufficient cash for the month of January. Regardless if the company has sufficient cash, what steps should the owner take in the event of a negative cash balance? (9 marks)