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ACCT 3208 Case Assignment The following information is available for Brown Limited, a merchandiser selling computer equipment. Brown is a new company with no prior experience with budgeting. Cash balance October 1 is $22,000 Actual sales for August and September and expected sales for October are as follows: September $60,000 $700,000 October $30,000 $400,000 Cash Sales $50,000 Sales on Account $400,000 Sales on account are collected over a three-month period as follows: 10% collected in the month of sale, 70% collected in the month following sale, and 15% in the second month following sale. The remaining 5% in uncollectible. Purchases of inventory will total $250,000 for October. 40% ofa month's inventory . V purchases are paid during the month of purchase. The remaining 60% is paid the month after purchase. No cash discounts are available for inventory purchases. September's purchases totalled $300,000. 3 Selling and administrative expenses are budgeted at $350,000 for October. Of this amount $40,000 is for depreciation. 4various capital expenditures costing $125,000 will be purchased for cash during October S "Dividends of $20,000 will be paid during the month. 6v The company maintains a minimum cash balance of $20,000. The Company currently has available an open line of credit at its local bank for $100,000. This open line can be used to bolster the company's cash position as needed. Required Prepare a cash budget for October. In the financing section indicate any borrowing that may be needed during the month. Provide Brown Limited with your comments on this budget including any limitations. Please provide specific comments and advice you think might be necessary based on the projected October cash budget 1. 2. * Case can be done individually or in groups of two. Solutions are limited to two pages one for Quantitative analysis and one for qualitative discussion. Assignments to be handed in in good form (Excel and/or word documents) in class by November 6, 2017. Late assignments will receive a penalty of 1 point per day up to 3 days. After 3 days no assignment will be accepted and students will receive a mark of zero

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