unship plans to order supplies every quarter of the yr sr after they are ordered. It expects to use them the t after that. For example, if it orders supplies in the fir: esond quarter, use them in the third quarter, and paw, p pays salaries in the quarter that the employees on in equal amounts throughout the yea r. However, it r: it returns are led. it plans to borrow 535,000 on a 2! int day of the fourth quarter. Interest will be paid or t is paid only on outstanding debtthat which has nr 5 operating budget following the unique rules of mod ler these rules expenses are recognized when the toyI obligated to pay for them. It does not matter if they r eds from long-term loans are treated as ifthey were table below, prepare an operating budget and a easl rth quarter only. Assume the town has $3M,DDD in or 9:20 2.Ill 46% 2-23 - Read-only K . . . Sign in to edit and save chang... V 2-23. Middleboro Township plans to order supplies every quarter of the year. It expects to receive the supplies in the quarter after they are ordered. It expects to use them the quarter after that and to pay for them the quarter after that. For example, if it orders supplies in the first quarter of the year, it will receive them in the second quarter, use them in the third quarter, and pay for them in the fourth quarter. The township pays salaries in the quarter that the employees work. The township earns its income tax revenues in equal amounts throughout the year. However, it receives substantially more cash in April, when tax returns are filed. It plans to borrow $35,000 on a 20-year, 5 percent annual interest note on the first day of the fourth quarter. Interest will be paid once each year at the end of the third quarter. Interest is paid only on outstanding debt-that which has not yet been repaid The town prepares its operating budget following the unique rules of modified accrual accounting used by governments. Under these rules expenses are recognized when the town receives goods or services and becomes legally obligated to pay for them. It does not matter if they have been used or not. Also, cash inflows or proceeds from long-term loans are treated as if they were revenues. Using the information from the table below, prepare an operating budget and a cash budget for Middleboro Township for the fourth quarter only. Assume the town has $300,000 in cash when the fourth quarter starts. Jan - Mar April - Jun July- Sept Oct - Dec Tota Supply Orders $300,000 $360, 000 $390,000 $330,000 $1,380,000 Salaries 600,000 750,000 825,000 720,000 2,895,000 Income Tax 600,000 500,000 1,200,000 600,000 3,000,000 Cash Reciepts O A