Xeriscape Nurseries, Inc., has four divisions. The corporation’s controller has been asked to prepare

Basic Cash BudgetP5.Xeriscape Nurseries, Inc., has four divisions. The corporation’s controller has been asked to prepare a cash budget for the Northern Division for the first quarter. Projected data supporting this budget follow. sales (60% on credit) Purchases November $160,000 December $ 90,000 December 200,000 January 98,000January 120,000 February 100,000February 160,000 March 104,000March 140,000Collection records of accounts receivable have shown that 40 percent of all credit sales are collected in the month of sale, 50 percent in the month following the sale, and 8 percent in the second month following the sale; 2 percent of the sales are uncol- lectible. All purchases are paid for in the month of the purchase. Salaries and wages are projected to be $25,000 in January, $33,000 in February, and $21,000 in March. Esti- mated monthly costs are utilities, $4,220; collection fees, $1,700; rent, $5,300; equip- ment depreciation, $5,440; supplies, $2,480; small tools, $3,140; and miscellaneous,$1,900. Each of the corporation’s divisions maintains a $10,000 minimum cash balance and can borrow from the bank in multiples of $100, as needed. As of December 31, the Southern Division had a cash balance of $10,000.reQUIreD1. Prepare a monthly cash budget for Xeriscape Nurseries’ Northern Division for the first quarter.2. ACCounting ConneCtion▶ Should Xeriscape Nurseries anticipate taking out a loan for the Northern Division during the quarter? If so, how much should it borrow, and when?