We really need to get this new highprecision cutter equipmen

We really need to get this new high-precision cutter equipment in operation just after the next quarter begins.I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at Fashionable Credit Union. This statement by Joanna Size, President of Women Designer Company, concluded a meeting she had called with the firm\'s top management. Women is a small, rapidly growing wholesaler of casual and professional clothes products. The firm\'s main product lines are women\'s wear and accessories. John Weng, Women\'s General Manager of Merchandising, has recently completed a sales forecast. He believes the company\'s sales during the next quarter ending March 31, 2021 will increase by 20 percent each month over the previous month\'s sales. Then Weng expects sales to remain constant for several months. Women\'s projected balance sheet as of December 31, 2020, is as follows Cash Accounts receivable Marketable securities Inventor Buildings and equipment (net of accumulated depreciation) Total assets Accounts Bond interest payable Property taxes payable Bonds payable (11%; due in 2026) Common stock Retained earnings Total liabilities and stockholders\' equity $90,000 175,000 50,000 300,000 1,250,000 $1,865,000 $225,000 22,000 16,800 600,000 750,000 251,200 Karen Complete, the Controller, is now preparing a monthly budget for the first quarter of 2021. In the process, the following information has been accumulated:

Solution

ans 1 January Februry March Quarter April Total sales T (increase by 20%) $600,000 $720,000 $864,000 $2,184,000 $1,036,800 Cash sales $120,000 $144,000 $172,800 $436,800 Credit sales C= (80%*T) $480,000 $576,000 $691,200 $1,747,200 Schedule of Expected Cash Collections Cash Sales (20% for cash) S $120,000 $144,000 $172,800 $436,800 Credit Sales same month D= (20%*T) $96,000 $115,200 $138,240 $349,440 Credit sales next month   175000 $384,000 $460,800 $1,019,800 Total Collections $391,000 $643,200 $771,840 $1,806,040 3) Purchases Budget January February March Quarter April Budgeted Cost of Goods Sold (42%*sales) $252,000 $302,400 $362,880 $917,280 $435,456 Add Desired Ending Inventory (25%*next COGS) $75,600 $90,720 $229,320 $229,320.0 Total Needs $327,600 $393,120 $592,200 $1,146,600 Less Beginning Inventory $30,000 $75,600 $90,720 $30,000 Required Purcahses P $297,600 $317,520 $501,480 $1,116,600 Schedule of Expected Cash Disbursements- Merchandise Purchases (35% in same month and 65% in next month) January February March Quarter Cash payments for purchases during the current month (35%*P) $104,160 $111,132 $175,518 $390,810 Cash payments for purchases during the preceding month $225,000 $193,440 $206,388 $624,828 Disbursements D $329,160 $304,572 $381,906 $1,015,638 Other Expenses: Sales Salaries 65000 65000 65000 195000 Advertising & Promotion 20000 20000 20000 60000 Admin Salaries 45000 45000 45000 135000 Interest on bonds (22000+5500) 27500 27500 Property taxes (4200*6) 25200 25200 Sales commissions $30,000 $36,000 $43,200 109200 Total Cash Payments for other expenses C 187500 191200 173200 551900 Total Cash Disbursements D+C $516,660 $495,772 $555,106 $1,567,538 20x1 January February March Cash Receipts (from part 2) $391,000 $643,200 $771,840 Less: Cash disbursements (from part 4) $516,660 $495,772 $555,106 Change in cash balance during period due to operations ($125,660) $147,428 $216,734 Sales of marketable securities (1/2/x1) 50000 Proceeds from bank loan (1/2/x1) 615660 Purchase of equipment -500000 Repayment of bank loan (3/31x1) -314153 (216734-20009-30000-130000) Interest on bank loan -20009 (615660*13%*3/12) Payment of dividends -30000 Change in cash balance during 1stQuarter $40,000 $147,428 ($147,428) Cash balance, 1/1/x1 90000 $130,000 $277,428 Cash balance 1/31/x1 $130,000 $277,428 $130,000 Dear student I have done first five subparts