On December $1,2020,$ Brisco Wholesale Company $($BWC$)$ is attempting to project cash receipts and

disbursements for the current month of December $2020$ and for the following month of January $2021.$

On January $31,2021,$ a note is due and payable to their bank in the amount of $$120,000.$ As Brisco is a

seasonal business, this loan $($called a bridge loan$)$ was needed to get them through the last $3$ months of

$2020$ and the first month of $2021.$ The funds from the note were received by Brisco on October $1,2020.$

Interest on the loan is at an annual percentage rate of $4\%$ and is also due on January $31,2021.$

The company had $$32,000$ in ending cash balance on December $1,2020.$

Sales are all on account $($credit$)$ with customer terms being net $30$ days from the date of invoice which

can also be assumed to be when the sales revenue is recognized. Brisco has very good relations with

most of their customers who realize how seasonality impacts Brisco's cash flow. Past experience has

shown that $38\%$ of customer accounts are collected in the month of sale, $50\%$ in the month following

sale, and $12\%$ in the second month following sale. The average selling price of the company's products

is $$120$ per unit.

Actual and projected sales are as follows:

All purchases are made on account $($credit$)$ with the terms of net $30$ days from date of purchase. Brisco

still pays for $25\%$ of their purchases in the month of purchase and $75\%$ in the month following purchase.

Brisco's average purchase per unit is $$84$ per unit.

Brisco has an inventory policy to always have a minimum of $500$ units on hand at the end of each month

plus $25\%$ of next month's budgeted unit sales.

Brisco has $$40,000$ in monthly fixed costs which includes $$3,000$ of depreciation. The fixed costs are paid

as incurred within the same month.

Required:

a$)$ Prepare a cash budget for December $2020$ and for January $2021.$

b$)$ Will BWC have enough cash on hand on January $31,2021,$ to pay the bank in full $?$