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Information from marketing regarding sales: Actual Sales for December were $280,000. Sales Projections for January through Aprilare: January: $400,000 February: $500,000 March: $300,000 . April:

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Information from marketing regarding sales: Actual Sales for December were $280,000. Sales Projections for January through Aprilare: January: $400,000 February: $500,000 March: $300,000 . April: $200,000 Sales are 70% for cash and 30% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. The company's gross margin is 50% of sales. (In other words, cost of goods sold is 50% of sales.) Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month advertising, $70,000 per month shipping, 5% of sales other expenses, 3% of sales Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter. Each month's ending inventory should equal 40% of the following month's cost of goods sold. The December 31 ending inventory can be found in the financial statement information above. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid the following month. The December purchases are the amount of Accounts Payable shown in the financial statement information above. During February, the company will purchase a new t-shirt making machine for $150,000 cash. During March, other equipment will be purchased for cash at a cost of $90,000. During January, the company will declare and pay $55,000 in cash dividends. Management MUST maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company - if it is able will repay loans in total. Prepare the following in good form (meaning clearly labeled) for January, February and March using Excel 1. Schedule of Cash Collections (5 points) 2. A Schedule of Merchandise Purchases (also called Merchandise Purchase Budget) (10 points) 3. A Schedule of Cash Disbursements for Inventory Purchases (10 points) 4. A Schedule of Cash Disbursements for Expenses (10 points) 5. Cash Budget (10 points) 6. Indicate the amount borrowed and load balance ignoring interest (5 points)

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