3) The Smart Company has been in business for 5 years and is located in Sault Ste. Marie, Ontario. The company has budgeted the following information for 2021:

	May	June	July	August
Budgeted purchases	$50,000	$60,000	$45,000	$55,000

• Cost of goods sold is 50% of sales. Accounts payable is used only for inventory acquisitions.
• ABC purchases and pays for merchandise 50% in the month of acquisition and 50% in the following month.
• Selling and administrative expenses are budgeted at $30,000 for May and are expected to increase 2% per month. They are paid during the month of acquisition. In addition, budgeted Depreciation is $5,000 per month.
• ABC pays $700 per month towards a bank loan.
• New equipment costing $12,000 will be purchased in June and an additional equipment purchase for $3,000 will be made in July. Depreciation on the new equipment will start in the month of purchase.
• Income taxes are $5,000 for July and are paid in the month incurred.

Calculate the budgeted cash disbursements for July? If cash disbursements exceed cash receipts, what options does a company have to fund the deficit.