Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company's bank in late 2019 seeking short-term financing, he was told that money was very tight and that any borrowing over the next year would have to be supported by a detailed statement of cash receipts and disbursements. He was also told that it would be very helpful to the bank if borrowers would indicate the quarters in which they would be needing funds, as well as the amounts that would be needed, and the quarters in which repayments could be made Since the treasurer is unsure as to the particular quarters in which the bank financing will be needed, he has assembled the following information to assist in preparing a detailed cash budget: a. Budgeted sales and merchandise purchases for the year 2020, as well as actual sales and purchases for the last quarter of 2019, are as follows: Merchandise Purchases Sales 2019: Fourth-quarter actual S 280,000 S176,400 2020: First-quarter estimated Second-quarter estimated Third-quarter estimated Fourth-quarter estimated 420,000 560,000 700,000 280,000 260,400 347,200 427,000 176,400 b. The company normally collects 65% of a quarter's sales before the quarter ends and another 33% in the following quarter. The remainder are uncollectible. This pattern of collections is now being experienced in C. 80% of a quarter's merchandise purchases are paid for within the quarter. The remainder are paid in the d. Operating expenses for the year 2020 are budgeted quarterly at $70,000 plus 15% of sales. Of the fixed e. The company will pay $14,000 in dividends each quarter the 2019 fourth-quarter actual data. following quarter. amount, $28,000 each quarter is depreciation. f. Equipment purchases of S105,000 will be made in the second quarter, and purchases of $67,200 will be g. The cash account contained $14,000 at the end of 2019. The treasurer feels that this represents a h. Any borrowing will take place at the beginning of a quarter, and any repayments will be made at the end made in the third quarter. These purchases will be for cash. minimum balance that must be maintained of a quarter at an annual interest rate of 10%. Interest is paid only when the principal is repaid. All borrowings and all repayments of the principal must be in round S1,000 amounts. Interest payments can be in any amount. (Compute interest on whole months, e.g., 1/12, 2/12.) i. At present, the company has no loans outstanding