The following data relate to the operations of Picanuy Corporation, a wholesale

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The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: Current assets as of December 31: Cash $ 6,300 Accounts receivable $ 38,280 Inventory $ 10,640 Buildings and equipment, net $ 119,700 Accounts payable $ 32,480 Capital stock $ 100,000 Retained earnings $ 42,440 a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) b. Actual and budgeted sales data are as follows: December (actual) $63,800 January $76,000 February $87,100 March $88,500 April $62,900 c. Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. d. Each month’s ending inventory should equal 20% of the following month’s budgeted cost of goods sold. e. One-quarter of a month’s inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory. f. Monthly expenses are as follows: commissions, $14,000; rent, $1,350; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,870 for the quarter and includes depreciation on new assets acquired during the quarter. g. Equipment will be acquired for cash: $6,900 in January and $8,410 in February. h. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter: Using the data above: 1. Complete the following schedule

4. Complete the following cash budget. (Borrow and repay in increments of $1,000. Cash deficiency, repayments and interest should be indicated by a minus sign. Round yol a swers to 2 decima places.) Picanuy Corporatiorn Cash Budget January February- March Quarter Cash balance, beginning Add cash collections Total cash available Less cash disbursements: 6,300.00 68,680.00 74,980.00 For inventory For operating expenses For equipment 46,168.50 21,430.00 6,900.00 74,498.50 481.50 Total disbursements Excess (deficiency) of cash Financing Borrowings Repayments interest Total financing Cash balance ending

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The following data relate to the operations of Picanuy Corporation, a wholesale

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