E23-4 Scents Unlimited is a distributor of fragrances. For each of items a through

c. compute the amount of cash receipts or payments Scents will budget for September. The solution to one item may depend on the answer to an earlier item.

a. Management expects to sell equipment that cost $12,000 at a gain of $2,000. Accumulated depreciation on this equipment is $7.000.

b. Management expects to sell 7,500 bottles in August and 8.400 in September. Each bottle sells for $16. Cash sales average 30% of total sales, and credit sales make up the rest. Three-fourths of credit sales are collected in the month of sale, with the balance collected the following month.

c. The company pays rent and property taxes of $3,500 each month. Commissions and other selling expenses average 25% of sales. Scents pays two-thirds of commissions and other selling expenses in the month incurred, with the balance paid in the following month.