MEMC Company has just completed the second draft of their master budget. The cash budget summary shows a negative cash balance in Quarter 1, 3 and 4. The company is considering financing the deficits with a combination of long term and short-term loans. Short term borrowing will incur a 6% interest rate while a long-term loan interest rate will be 10%. Another plan is to negotiate a favorable term of credit from suppliers. The Cash budget summary, the budget Income statement and the budget Balance Sheet are shown below. Evaluate the cash budget situation and suggest actions that can be taken to prepare the company for the next period of operations. Prepare a new revised Cash Budget, revised Income Statement and revised Balance Sheet. Do not include any taxes in your calculations. Include liquidity, profitability, and debt management analysis in your evaluation. MEMC for Budget Year 2025: Cash Budget Quarter 1 2 Cash Balance Beginning 3 32,500 -38,000 32,000 ADD: Receipts -18,000 450,000 500,000 500,000 500,000 Total Cash Available LESS: Disbursements 482,500 462,000 532,000 482,000 520,500 430,000 550,000 500,000 Excess (Deficits) of Cash -38,000 MEMC for Budget Year 2025: Income Statement 32,000 -18,000 Sales Cost of Goods Sold 2,000,000 1,300,000 Gross Margin Selling and Administration Expense 700,000 576,000 Net Operating Income Interest Expense 124,000 1,200 Net Income Previous Retain Earnings Add: Net Income 449,900 122,800 Less: Dividends New Retain Earnings 20,000 552,700 MEMC for Budget Year 2025: Balance Sheet Current Assets Cash -18,000 Account Receivables 150,000 Raw Materials 38,200 Inventories 34,000 Total Current Assets 204,200 Land 100,000 Plant and Machines 830,000 Less: Accumulated Depreciation 392,000 Plant and Machines Net 438,000 TOTAL ASSETS 742,200 Current Liabilities Accounts Payable 14,500 Total Current Liabilities 14,500 Stockholders’ Equity Common Stock 175,000 Retained Earnings 552,700 Total Equity 727,700 TOTAL LIABILITIES AND EQUITY 742,200