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You have been engaged as a consultant to design a master budget model and then to assist Helping Hand Corp. in making some management decisions based on that master budget. Helping Hand is a small, rapidly growing wholesaler of consumer electronic products. The company's main product lines are small kitchen appliances and power tools. The marketing manager has recently completed a sales forecast. She believes the company's sales will increase by 1 percent each month over the previous month's sales from December 2015 through March 2016. Then sales are expected to remain constant for several months. Helping Hand's projected balance sheet as of December 31,2015 is as follows: The following information has been accumulated to assist with preparing the master budget for the first quarter of 2016 : 1) Projected sales for November 2015 are $200,000. Credit sales are typically 90% of total sales. Helping Hand's credit experience indicates that 13% of credit sales are collected during the month of sale, 75% in the month following the sale, and 10% in the second month following the sale. Experience shows the remaining credit sales are uncollectible. 2) Helping Hand's cost of goods sold generally runs at 65% of sales. Inventory is purchased on account and 15% of each month's purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the company attempts to have inventory on hand at the end of each month equal to 30% of the next month's projected cost of goods sold. In addition, sales commissions run at the rate of 2.0 percent of sales. Sales commissions are paid in the month following the month of sale. 4) The company president has indicated that the company should invest $225,000 in an automated inventory-handling system to control the movement of inventory in the company's warehouse just after the new year begins. The president would like to purchase the equipment primarily from the company's cash and marketable securities. However, the president believes the company should have a minimum cash balance of $30,000 at the end of each month. If necessary, the remainder of the equipment purchase may be financed using short-term credit from a local bank. The minimum lending period for such a loan is three months. The current short-term interest rates are 6 percent per year and are expected to remain at this rate through the time the equipment is purchased. If a loan is necessary, the president has decided it should be paid off at the end of the first quarter if possible. Any partial payment will be paid at the end of the first quarter and in a $1,000 increment. 5) Helping Hand's board of directors has indicated an intention to declare and pay dividends of $150,000 on the last day of each quarter. 6) The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Helping Hand's bonds is paid semiannually on February 28 and August 31 for the preceding sixmonth period. 7) Property taxes are paid quarterly on March 31, June 30, September 30, and December 31 for the preceding three-month period. Required: Build a model to forecast Helping Hand Corp's cash balance at March 31, 2016. Your model must contain the following master budget schedules. Round all amounts to the nearest dollar. Your model should allow you to change any of the assumptions provided above and easily recalculate the ending cash balance at March 31,2016 . The assumptions may be on a separate worksheet but all of the schedules below must be on one worksheet. Cas Cas Cas Cas Tot 3) Prchases hget: 5) Summarv cash budget: 6) Prepare a memo to the president of Helping Hands Corp with at least two recommendations on how the company can ensure it completes the first quarter of 2016 with the minimum required cash balance. You should provide a plan to support your recommendation. For example, if you recommend an increase in sales, how can this be attained. Be specific. You should provide specific financial information for your recommendations utilizing your model (include a model for each of your recommendations). For example, if the company does X, the change in ending cash will be Y. Your model will become the property of Helping Hands Corp. and should be easy to use