Question 1: Calgon Products, a distributor of organic beverages, needs acash budget for September. The following information isavailable:

a.

The cash balance at the beginning of September is $9,750.

b.

Actual sales for July and August and expected sales forSeptember are as shown below. Sales on account are collected over athree-month period as follows: 10% collected in the month of sale,70% collected in the month following sale, and 18% collected in thesecond month following sale. The remaining 2% is uncollectible: July August September Cash Sales $8,000 $6,000 $8,000 Sales on Account $27,500 $45,000 $55,000 Total Sales $35,500 $51,000 $63,000

c.	Purchases of inventory will total $32,500 for September. Twentypercent of a month’s inventory purchases are paid for during themonth of purchase. The accounts payable remaining from August’sinventory purchases total $25,000, all of which will be paid inSeptember.
d.	Selling and administrative expenses are budgeted at $20,500 forSeptember. Of this amount, $7,000 is for depreciation.
e.	Equipment costing $25,500 will be purchased for cash duringSeptember, and dividends totalling $5,300 will be paid during themonth.
f.	The company maintains a minimum cash balance of $5,400. An openline of credit is available from the company’s bank to bolster thecash position as needed. Assume any borrowings occur at thebeginning of the month and repayments occur at the end of themonth. Interest on outstanding loan balances during the month mustbe paid at the end of each month. The monthly interest rate is0.5%.

Required:

Prepare a schedule of expected cash collections for September. Prepare a schedule of expected cash disbursements for Inventoryduring September Prepare a cash budget for September Cash Balance, September 1 Less Disbursements: Excess/Deficiency of cash available Financing: