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You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the companys operations:

The cash balance on December 1 will be $39,000.

Actual sales for October and November and expected sales for December are as follows:

	October				November				December
Cash sales	$	63,000			$	68,000			$	82,000
Sales on account		392,000				521,000				598,000

Sales on account are collected over a three-month period in the following ratio: 16% collected in the month of sale, 58% collected in the month following sale, and 21% collected in the second month following sale. The remaining 5% are uncollectible.

Purchases of inventory will total $279,000 for December. 31% of a months inventory purchases are paid during the month of purchase. The accounts payable remaining from Novembers inventory purchases total $159,000, all of which will be paid in December.

Selling and administrative expenses are budgeted at $430,000 for December. Of this amount, $49,000 is for depreciation. These are paid in the period incurred.

A new Web server for the Marketing Department costing $77,000 will be purchased for cash during December, and dividends totalling $9,000 will be paid during the month.

The company must maintain a minimum cash balance of $20,000. An open line of credit is available from the companys bank to bolster the cash position, as needed.

Required:

1. Prepare a schedule of expected cash collections for December.

2. Prepare a schedule of expected cash disbursements for materials during December to suppliers for inventory purchases.

3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month.

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