Dorothy Koehl recentlyleased space in the Southside Mall and opened a new business,Koehl's Doll Shop. Business has been good, but Koehl frequently runout of cash. This has necessitated late payment on certain orders,which is beginning to cause a problem with suppliers. Koehl plansto borrow from the bank to have cash ready as needed, but first sheneeds a forecast of how much she should borrow. Accordingly, shehas asked you to prepare a cash budget for the critical periodaround Christmas, when needs will be especially high.

Sales are made on acash basis only. Koehl's purchases must be paid for during thefollowing month. Koehl pays herself a salary of $4,300 per month,and the rent is $2,400 per month. In addition, she must make a taxpayment of $10,000 in December. The current cash on hand (onDecember 1) is $500, but Koehl has agreed to maintain an averagebank balance of $4,500 - this is her target cash balance.(Disregard the amount in the cash register, which is insignificantbecause Koehl keeps only a small amount on hand in order to lessenthe chances of robbery.)

The estimated salesand purchases for December, January, and February are shown below.Purchases during November amounted to $140,000.

Sales Purchases December 130,000 45,000 January 36,000 45,000 February 64,000 45,000 Prepare a cash budget for December, January, and February. I. Collections and Purchases: Need answers for December, January, February Sales Purchaes Payments for Purchaes Salaraies Rent Taxes Total Payments Cash at start of forecast Net Cash Flow Cumulative NCF Target Cash Balance Surplus Cash or Loans Needed b. Suppose Koehl starts selling on a credit basis on December 1,giving customers 30 days to pay. All customers accept these terms,and all other facts in the problem are unchanged. What would thecompany's loan requirements be at the end of December in this case?(Hint: The calculations required to answer this part areminimal.) _________