ater Sport inc. manufactures a small personal water tube used for children learning to swim. Management is now preparing detailed udgets for the third quarter. July through September, and has assembled the following information to assist: a. The Marketing Department has estimated sales as follows for the remainder of the year (number of water tubes): July 8,566 October 4J960 August 7,666 November 41560 September 6,666 December 4J666 he selling price ofthe water tubes is $50. .All sales are on account. Based on past experience. sales are expected to be collected in the following pattern: 56% in the month of sale 4596 in the month following sale 5% uncollec'tible he beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $170,000. c. The company maintains nished goods inventories equal to 20% of the following month's sales. The inventory of finished goods on Julyl will be 1700 units. 0'. Each watertube requires 4 kilograms of synthetic poiyisoprene rubber compound. To prevent shortages. the company would like the inventory of synthetic rubber compound on hand at the end of each month to be equal to 20% of the following month's production needs. The inventory of synthetic rubber compound on hand on July'l will be 6.560 kilograms. e. The synthetic rubber compound costs $3.50 per kilogram. Water Sport pays for 70% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for synthetic rubber compound purchases will be $11400 on July 1. Required: 1. Prepare a sales budget. by month and in total, for the third quarter. (Show your budget in both units of water tubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Budgeted sales (units) Selling price per unit Total budgeted sales Accounts receivable, beginning balance Julyr sales: August sales: September sales: Total cash collections 2. Prepare a production budget for each of the months July through October. Production budget July August September October Budgeted sales (units) Total needs Required production (units). Prepare a direct materials purchases budget for synthetic rubber compound, by month and in total, for the third quarter. Also repare a schedule of expected cash disbursements for synthetic rubber compound, by month and in total, forthe third quarter. Required production (units) Material D236 needed per unit (kgs) Production needs \"(95.) Raw materials to be purchased Cost of raw materials to be purchased at $3.50 per kg