Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the companys accounting records:

Problem 9-31 Cash Budgeting (LO 9-3, 9-50 Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20 The following information has been extracted from the company's accounting records: All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent ofthe accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1 Seventy percent of the merchandise purchases are paid for in the month of purchase, the remaining 30 percent are paid for in the month after acquisition. The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $80,000; accounts receivable, $225,000, and accounts payable, $78,000 Sophisticates, Inc., maintains a $80,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 10 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid atthe time of repaying principal and computed on the portion of principal repaid at that time. Additional data January February March Sales revenue $570,000 $660,000 $675,000 Merchandise purchases 390,000 420,000 540,000 Cash operating costs 05.000 84.000 147.000 Proceeds from sale of equipment 27,000