We really need to get this new material-nandling equipment in operation just after the new year begins. I nope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank." This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm's top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm's main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal's General Manager of Marketing, has recently completed a sales forecast. She believes the company's sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month's sales. Then Wilcox expects sales to remain constant for several months. Intercoastal's projected balance sheet as of December 31, 20x0, is as follows: Cash Accounts receivable Marketable securities Inventory Buildings and equipment (net of accumulated depreciation) Total assets Accounts payable Bond interest payable Property taxes payable Bonds payable (10%; due in 206) Common stock Retained earnings Total liabilities and stockholders' equity $ 45,000 360,000 15,000 192,500 600,000 $1,212,500 $ 220,500 13,750 6,000 330,000 500,000 142,250 $1,212,500 Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 201. In the process, 1. Projected sales for December of 20x0 are $500,000. Credit sales typically are 80 percent of total sales. Intercoastal's credit experience indicates that 10 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month. 1. Sales budget: Total sales Cash sales Sales on account 20x0 December 20x1 January February March First Quarter 0 0 0 0 0