Burr, Inc. provided the following information:

July August

Projected sales $220,000 $260,000

Projected merchandise purchases $150,000 $180,000

• Burr estimates that it will collect 60% of its sales in the month of sale, 35% in the month after the sale, and 22% in the second month following the sale. Fivepercent of all sales are estimated to be bad debts.

(Cont.)

• Burr pays 30% of merchandise purchases in the month purchased and 70% in the following month.
• General operating expenses are budgeted to be $20,000 per month of which depreciation is $2,000 of this amount. Burr pays operating expenses in the month incurred.
• Burr makes loan payments of $3,000 per month of which $400 is interest and the remainder is principal.

Instructions

Calculate Burr's budgeted cash disbursements for August.