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Westex Products is a wholesale distributor of Industrial company's bank late In the current year seeking shon-term financing, he was told that money was cleaning

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Westex Products is a wholesale distributor of Industrial company's bank late In the current year seeking shon-term financing, he was told that money was cleaning products. When the treasurer of Westex Products approached the very tight and that any borrowing t told thet It would be very helpful the amounts that would be needed, and the quarters In which repayments could be made. Because Information statement of cash collections and disbursements. The treasurer also wes needing funds, as well as oorticular quarters In which bank financing will be needed, he hes assembled the foilowing to the bank if borrowers would Indicate the quarters in which they would be the treasurer Is unsure as to the which bank to assist In preparing a detailed cash budget a Budgeted sales and merchandise purchases for next year, as well as actual sales and purchases for the last quarter of the current year, are: current Yeara ourh GUARLAR HEu 200,000 126,000 Sext yeari First quarter estinated Second quarter estinated hird quarter estinated Fourth quarter estinated s 300,000 186,000 400,000 246,000 500,000 305,000 200,000 126,000 b Aa sacs are on account. The company normally colects 65% of a quarter's 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 current collections is now being experlenced in the current years fourth quarter actual data. c Eighty percent of a quarter's merchandise purchases are paid for within the quarter. The remainder is paid for in the folowing quarter d. Selling and administrative expenses for next year are budgeted at $50,000 per quarter plus 15% of sales of the ted amount $20,000 each quarter is depreclation. e. The company will pay $10,000 in dividends each quarter t Land purchases of $75,000 will be made in the second quarter, and purchases of $48,000 will be made in the third quarter These purchases will be for cash g The Cash account contained $10,000 at the end of the current year. The treasurer feels that this represents a minimum balance that must be maintained h. The company's bank allows borrowing in increments of $1,000 at the beginning of each quarter, up to a total loan balance d $100,000. The interest rate on these loans is 2.S% per quarter and for simplicity we will assume that interest is not compounded. The company would, as far as it is abie, repay the loan plus accumulated interest at the end of the year L At present, the company has no loans outstanding Required L Cacuise the expected cesh colectons Dy queter and in tonal for next yesr cacu ate expected cash dsoursernents 90/ sedng and admnstrative expenses, by quarter ond in totai for next yeat 4 Prepare a cash budget by quanter and in total for next year

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