Burr, Inc. provided the following information:
_________________________________July ______August
Projected sales .....................................$220,000.........$260,000
Projected merchandise purchases........$150,000.........$180,000
• Burr estimates that it will collect 40% of its sales in the month of sale, 35% in the month after the sale, and 22% in the second month following the sale. Three percent of all sales are estimated to be bad debts.
• Burr pays 30% of merchandise purchases in the month purchased and 70% in the following month.• General operating expenses are budgeted to be $20,000 per month of which depreciation is $2,000 of this amount. Burr pays operating expenses in the month incurred.
• Burr makes loan payments of $3,000 per month of which $400 is interest and the remainder is principal.Calculate Burr's budgeted cash disbursements for August.