22 Sunhi House has budgeted sales revenues as follows: Cash sales Credit sales Total sales hane Autot $ 24,000 85.000 $109.000 $20,000 80,000 $100,000 $30,000 72.000 $102.000 99 10 11 12 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month 13 Purchases of inventory are all on credit. 70% of purchases is paid in the month of purchase and 30% in the month following purchase. Budgeted inventory purchases ar 14 25 16 17 June July August 18 Other cash disbursements budgeted: $45,000 43,000 40,000 19 selling and administrative expenses of $54,000 each month, which includes $10,000 depreciation. 20 Dividends of $30,000 will be paid in July, and purchase of a computer in August for 53,000 cash. 21 22 The beginning cash balance on July 1 was 525,000. The company wishes to maintain a minimum cash balance of $20,000 at the end of each month. 23 The company borrows money from the bank at 12% annual interest if necessary to maintain the minimum cash balance. 24 Borrowed money and interest is repaid in months when there is an excess cash balance. 5 6 Instructions: 1. Start with a schedule of cash collections for July and August to support the cash budget. (6 marks) B Cash Collections Sheett New ADY july August 24000 30000