Case #2 (Chapter 9) Highlands Company's balance sheet shows the following: Highlands Company Balance Sheet August 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets S 7,000 54,000 30,000 207.000 $298.000 Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings Total liabilities and stockholders' equity S 61,000 14,500 180,000 42.500 The company is preparing a budget for September and its accounting records show the following: The September's sales budget is $200,000. Thirty percent of the budgeted sales are expected to be cash sales. Seventy percent of the sales are expected to be credit sales. Fifty percent of the credit sales are expected to be collected during September. Another fifty percent are expected to be collected during October. All of the August accounts receivables are expected to be collected in September During September, purchases of inventory will be $120,000 which will be on credit. Of these purchases, $48,000 will be paid for in September and the remainder will be paid in October. The company will pay all of its August accounts payable to suppliers in September The inventory balance at the end of September is expected to be $40,000 Selling, general, and administrative expenses are expected to be $72,000, which will be paid in cash in September. In addition to $72,000, depreciation expense is expected to be $2,000 in September In September, the company will pay all of its August note payable balance. It will also pay $500 interest, which relates to September The company will buy new equipment at S6,500 with cash in September In September, $20,000 will be borrowed from a bank and the company will sign a note payable for it. The company will need to pay its new note payable a year later a. b. c. d. e. f. g. Required For September, prepare the followings. 1. Cash budget (10 points) 2. Budgeted income statement (10 points)