The Sheridan Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from January 1 through December 31. Production occurs only in the first quarter (January to March), but sales take place throughout the year. The sales forecast for the coming year shows the following: First quarter Second quarter $480,000 309.000 Third quarter Fourth quarter $480,000 480,000 There are no cash sales, and the beginning balance of receivables is expected to be collected in the first quarter. Subsequent collections are two-thirds in the quarter when sales take place and one-third in the following quarter. The company makes materials purchases valued at $396,000 in the first quarter, but makes no purchases in the last three quarters. It makes payment when it purchases the materials. Direct labour of $350,000 is incurred and paid only in the first quarter. Factory overhead of $338.000 is also incurred and paid in the first quarter, and is at a standby level of $99,000 during the other three quarters. Selling and administrative expenses of $35,000 are paid each quarter throughout the year. Sheridan has an operating line of credit with its bank at an interest rate of 5% per annum. The company plans to keep a cash balance of at least $10,000 at all times, and it will borrow and repay in multiples of $5,000. It makes all borrowings at the beginning of a quarter, and makes all payments at the end of a quarter. It pays interest only on the portion of the loan that it repays in a quarter. The company plans to purchase equipment in the second and fourth quarters for $71,000 and $150,000, respectively. The cash balance on January 1 is $25,000 and accounts receivable total $149,000,