UMA, adapted) PROBLEM 8-26 Completing a Master Budget [L02, LO4, LO7, LO8, LO9. Lo10] The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: Current assets as of December 31 $6,000 $36,000 $9,800 $110,885 $32,550 $100,000 $30,135 Cash Accounts receivable Inventory Buildings and equipment, net . . . Accounts payable Capital stock . a. b. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales) Actual and budgeted sales data are as follows: December (actual) January. February. March $60,000 $70,000 $80,000 $85,000 $55,000 Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (exclud- in c. e. f. g depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is s2,400 for the quarter and includes depreciation on new assets acquired during the quarter Equipment will be acquired for cash: $3,000 in January and $8,000 in February Management would like to maintain a minimum cash balance of $5,000 at the end of each month. 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, up to a total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that inter- est is not compounded. The company would, as far as it is able, repay the loan plus accumu- lated interest at the end of the quarter g. h. Required: Using the data above 1. Complete the following schedule: Schedule of Expected Cash Collections Cash sales Credit sales. Total collections . January February March Quarter $28,000 36,000 64,000 $