Westex Products is a wholesale distributor of industrial cleaning products. The company treasurer has assembled the following information to assist in preparing a detailed cash budget to support the company's loan application for short-term with a local bank:

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:

2019:

fourth quarter actual sales: $420,000

merchandise purchases: $264,600

2020:

first quarter estimated sales: $630,000

merchandise purchases: $390,600

second quarter estimated sales: $840,000

merchandise purchases: $520,800

third quarter estimated sales: $1,050,000

merchandise purchases: $640,500

fourth quarter estimated sales: $420,000

merchandise purchases: $264,600

b. the company normally collects 64% of a quarters sales before the quarter ends and another 33% in the following quarter. the remainder is uncollectible. this pattern of collections is now being experienced in the 2019 fourth quarter actual data

c. 80% of a quarters merchandise purchases are paid for within the quarter. the remainder are paid in the following quarter

d. operating expenses for the year 2020 are budgeted quarterly at $105,000, plus 15% of sales. of the fixed amount, $42,000 each quarter is depreciation.

e. the company will pay $21,000 in dividends each quarter

f. equipment purchases of $158,340 will be made in the second quarter, and purchases of $100,800 will be made in the third quarter. these purchases will be for cash.

g. the cash account contained $21,000 at the end of 2019. the treasurer feels that this represents a minimum balance that must be maintained.

h. any borrowing will take place at the beginning of a quarter, and any repayments will be made at the end of a quarter at an annual interest rate of 10%. interest is paid only when the principal is repaid. all borrowing and all repayments of the principal must be in round $1000 amounts. interest payments can be in any amount. (compute interest on whole months)

i. at present, the company has no loans outstanding.

1. Prepare the following by quarter and in total for year 2020:

a.) a schedule of expected cash collections

b.) a schedule of budgeted cash disbursements for merchandise purchases

2. compute the expected cash payments for operating expenses, by quarter and in total, for the year 2020

3. prepare a cash budget, by quarter and in total, for the year 2020. in your budget, clearly show the quarter(s) in which borrowing will be necessary and the quarter(s) in which repayments can be made, as requested by the company's bank (roundup "borrowing" and "repayments" answers to the nearest dollar amount. any "repayments", "interest" and "deficiency of cash" should be indicated by a minus sign)

4. consider the cash balance at the end of the fourth quarter as calculated in requirement (3). recalculate the ending balance if repayment if principal can be in round $100 amounts. (do not round immediate calculations. round to two decimal places)