On December 1, 2015, the Basma Wholesale Company is attempting to project cash receipts and disbursements through January 31, 2016. On January 31, 2016, a note will be payable in the amount of $120,000. This amount was borrowed in September to carry the company through the seasonal peak in November and December.

The following information is available as of December 1.

Cash ..........................................$12,000

Accounts receivable.........................336,000

Allowance for bad debts....................................$ 18,960

Inventory.....................................105,000

Accounts payable.............................................110,400

Sales terms call for a 2% discount if payment is made within the first 10 days of the month after purchase; after that, the full amount is due by the end of the month after purchase. Experience has shown that 70% of the billings will be collected within the discount period, 20% by the end of the month after purchase, 8% in the following month, and 2% will be uncollectible. There are no cash sales.

The average selling price of the company's products is $120 per unit. Actual and projected sales are as follows:

October actual...........................................$ 216,000

November actual..............................................300,000

December estimated.......................................360,000

January estimated............................................180,000

February estimated........................................144,000

Total estimated for year ended June 30, 2016......1,800,000

All purchases are payable within 15 days. Thus, approximately 50% of the purchases in a month are due and payable in the next month. The average unit purchase cost is $84. Target ending inventories are 500 units plus 25% of the next month's unit sales.

Total budgeted marketing, distribution, and customer service costs for the year are $480,000. Of this amount, $180,000 is considered fixed (and includes depreciation of $36,000). The remainder varies with sales. Both fixed and variable marketing, distribution, and customer service costs are paid as incurred.

Required

Prepare a cash budget for December and January. Supply supporting schedules for collections of receivables, payments for merchandise, and marketing, distribution, and customer-service costs. Will there be enough cash available on January 31, 2016, to repay the $120,000 note?