Abu Dhabi Products, Inc., is a merchandising company that sells school supplies. The company is planning its cash needs for the third quarter. In the past, Abu Dhabi Products had to borrow money during the third quarter to support peak sales of back-to-school materials, which occurs during August. The following information has been assembled to assist in preparing a cash budget for the quarter: a. The Total cash collections and disbursement for purchases are as follows (All amounts are in dollars): Total Cash collection Total Cash disbursed for Purchases Jul Aug Sept 70,000 47,760 59,600 95,000 31,250 30,375 Selling and administrative expenses will be incurred as follows: Selling expenses 7,200 9,700 8,500 Administrative expenses 5,600 7,200 6,100 b. Land costing $4,500 will be purchased in July. c. Dividends of $5,000 will be declared and paid in September. d. The cash balance on July 1st is $9,500; the company must maintain a cash balance of at least $10,000 at the end of each month. e. The company has an agreement with a local bank that allows it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 12% per year. The company would repay the loan plus accumulated interest at the end of the quarter.