The company plans to purchase $67,000 in new equipment during Feburary a $34,000 in new equipment during March; both purchases will be for cash. The company declares dividends of $22,000 each quarter, payable in the first month of the following quarter. A listing of the company's ledger accounts as of December 31 is given below: * Balance includes $59,400 in November sales and an additional $706,860 in December sales The company maintains a minimum cash balance of $55,000. The company has an agreement with a bank that allows the company to borrow cash at the beginning of each month. The interest rate on these loans is 1.50% per month and for simplicity we will assume that interest is not compounded. All borrowing is done at the beginning of a month; any repayments are made at the end of a month; the Company makes repayments in any month when the cash is available while still retaining at least $55,000 in cash. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan. You have just been hired as a new management trainee by Sneeques Inc., a distributor of low-cost sneakers to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare comprehensive budgets for the upcoming first quarter in order to show management the benefits that can be gained from an integrated budgeting program. To this end, you have worked with accounting and other areas to gather the information assembled below. The company sells many styles of sneakers but all are sold for the same price $22.00 per pair. Actual sales of sneakers for the last three months and budgeted sales for the next six months follow (in pairs of shoes): Sufficient inventory should be on hand at the end of each month to supply 15.0% of the shoes sold in the following month. The Company pays suppliers \$ 14.50 for a pair of shoes. One-half of a month's purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found sales are collected as follows: 37% of a month's sales are collected in the month of sale 53% is collected in the following month 10% is collected in the second month following sale Monthly operating expenses for the company are given below: Insurance is paid on an annual basis, on August 1st of each year