JUNE JULY AUGUST Credit sales $27000 $29000 $18000 Cash sales 18000 51000 390

JUNE JULY AUGUST
Credit sales $27000 $29000 $18000
Cash sales 18000 51000 39000
Total sales $45000 $80000 $57000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are: June $60000
July 50000
August 21000 Other cash disbursements budgeted: (a) selling and administrative expenses of $9500 each month (b) dividends of $22700 will be paid in July and (c) purchase of
a computer in August for $5000 cash. The company MUST maintain a minimum cash balance of $10000 at the end of each month. The company borrows money from the bank at 9% per year interest if necessary
to maintain the minimum cash balance of $10000. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was
$10000 of which none is borrowed. Instructions:
Prepare a cash budget for the months of July and August and Prepare separate schedules for expected collections from customers and expected payments for purchases
of inventory.