Ivan Sharpova is trying to decide whether he is going to need to take a loan in January to buy a new microcomputer system for his business. The microcomputer will cost $10,800. Sharpova has collected the following information about his operations as of December 31: 

1. Balances of selected ledger accounts: 

Cash..........................$2,120 

Accounts payable.....6,667 

2. Sales history and forecast (unit selling price $10): 

(Actual) October     $43,000 

(Actual) November   35,000 

(Actual) December   40,000 

(Forecast) January   50,000 

3. All sales are on credit and are due (required to be paid) 30 days after the sale. 

4. Fifty percent of a given month’s sales are collected one month after the sale (that is, 30 days); 45 percent are collected two months after sale; and 5 percent are uncollectible. 

5. Inventory is purchased under terms of 2/10 net 30. Sharpova always takes the 2 percent discount, but records purchases at gross cost. Accounts payable (shown above) related solely to inventory purchases. Inventory costs $5 per unit, gross. 

6. Other expenses, all paid in cash as required, average about 30 percent of sales dollars. Depreciation is part of these expenses and costs $3,000 per month. 

7. Sharpova keeps a minimum cash balance of $1,000. 

Required 

Prepare a cash budget for January, indicating whether Sharpova will need a loan to finance his computer acquisition.