Sportz Corporation is preparing a cash budget for the first two months of the coming year. The following data have been forecasted:

	January	February
Sales	$562,500	$600,000
Purchases	337,500	360,000
Operating Expenses:
Payroll	110,100	125,550
Advertising	39,525	47,100
Rent	6,560	6,560
Depreciation	17,800	17,800

End-of-January balances:

Cash	90,000
Bank loan	360,000

Additional data: Sales are 40% cash and 60% credit. The term of credit sales is 2/10, n/30. The collection pattern for credit sales is 80% in the month following the month of sale (of which 75% are collected within 10 days), and 20% in the month thereafter. Total sales in December of the prior year were $750,000. Purchases are all on credit, with 40% paid in the month of purchase and the balance the following month. Operating expenses are paid in the month incurred. The firm desires to maintain a minimum cash balance of $112,000 at the end of each month. Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made (at the end of the month) whenever the cash balance exceeds $112,000.

Required: a. Prepare the cash budget for February.