Calgon Products, a distributor of organic beverages, needs a cash budget for September. The

Calgon Products, a distributor of organic beverages, needs a cash budget for September. The following information is available:

a.	The cash balance at the beginning of September is $9,000.
b.	Actual sales for July and August and expected sales for September are as follows:

	July		August		September
Cash sales	$	6,500	$	5,250	$	7,400
Sales on account		20,000		30,000		40,000
Total sales	$	26,500	$	35,250	$	47,400

   

	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 18% collected in the second month following sale. The remaining 2% is uncollectible.
c.	Purchases of inventory will total $25,000 for September. Twenty percent of a month's inventory purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $16,000, all of which will be paid in September.
d.	Selling and administrative expenses are budgeted at $13,000 for September. Of this amount, $4,000 is for depreciation.
e.	Equipment costing $18,000 will be purchased for cash during September, and dividends totaling $3,000 will be paid during the month.
f.	The company maintains a minimum cash balance of $5,000. An open line of credit is available from the company's bank to bolster the cash balance as needed.

   

Required:
1.	Prepare a schedule of expected cash collections for September. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Schedule of Expected Cash Collections
September cash sales	$ 7,400
September collections on account:
July sales	3,600
August sales	21,000
September sales	4,000
Total cash collections	$ 36,000

   

2.	Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations. Omit the "$" sign in your response.)

   

Schedule of Expected Cash Disbursements
Payments to suppliers:
August purchases	$ 16,000
September purchases	5,000
Total cash payments	$ 21,000

   

3.

Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Calgon Products Cash Budget For the Month of September
Cash balance, beginning		$ 9,000
Add cash receipts:
Collections from customers		36,000
Total cash available before current financing		45,000
Less disbursements:
Payments to suppliers for inventory	$ 21,000
Selling and administrative expenses	9,000
Equipment purchases	18,000
Dividends paid	3,000
Total disbursements		51,000
Excess (deficiency) of cash available over disbursements		-6,000
Financing:
Borrowings		11,000
Repayments		0
Interest		0
Total financing		11,000
Cash balance, ending		$ 5,000