To prepare a master budget for January, February, and March of 2018, management gathers the following information a. The company's single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 4,750 units on December 31, 2017 is more than management's desired level, which is 20% of the next month's expected sales in units). Expected sales are: January 7,250 units: February, 9.000 units: March, 11.250 units; and April, 10.500 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 63% is collected in the first month after the month of sale and 37% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance. $125,000 is collected in January and the remaining $395.000 is collected in February c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance. $60,000 is paid in January and the remaining $310,000 is paid in February. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $84,000 per year. e. General and administrative salaries are $144,000 per year. Maintenance expense equals $1,900 per month and is paid in cash. 1 Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter January, $36,000; February, $100,800; and March, $26,400. This equipment will be depreciated under the straight- line method over eight years with no salvage value. A full month's depreciation is taken for the month in which equipment is purchased g. The company plans to buy land at the end of March at a cost of $145,000, which will be paid with cash on the last day of the month. h. The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and Interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $44,000 at the end of each month 1. The income tax rate for the company is 37%. Income taxes on the first quarter's income will not be paid until April 15