Budget Project Howe Ltd. is trying to decide whether it is going to need to take a loan in coming January to buy a new microcomputer system. The microcomputer will cost $8,800. The president, Joan Howe, has collected the following information about her operations as at December 31: 1. Balances of selected ledger accounts: Cash Accounts payable $2,500 6,667 2. Sales history and forecast (unit selling price, $10): October November December January (actual) (actual) (actual) (forecast) $45,000 33,000 45,000 60,000 3. All sales are on credit and are due 30 days after the sale. 4. Cash payments for purchases are as follows: two-thirds in the month of purchase; one-third in the month after that. 5. Howe Ltd. collects 50% of a month's sales one month after the sale and 45% two months after the sale; 5% are uncollectible. 6. The company purchases inventory as required under terms of 2/10, net 30. It always takes the 2% discount, but records purchases at gross cost. Accounts payable (shown above) relate solely to inventory purchases. Inventory costs $5 per unit, gross. 7. Inventory costs $5 per unit, gross. 8. Other expenses, all paid in cash as incurred, average about 30% of the sales dollar amount. Depreciation is part of these expenses and costs $3,000 per month. 9. Howe Ltd. keeps a minimum cash balance of $4,000. Instructions: Prepare a cash budget for January Indicating whether Howe Ltd will need a loan to finance its computer acquisition.