Cash Budget Exercise 2 Rahman Products, a distributor of organic beverages, needs a cash budget for October. The following information is available: a. The cash balance at the beginning of October is $10,000. b. Actual sales for August and September and expected sales for October are as follows: Sales on account are collected over a three-month period in the following ratio: 20% collected in the month sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of inventory will total $25,000 for October. Twenty percent of a month's inventory purchases are paid for during the month of purchase. The accounts payable remaining from September's inventory purchases total $16,000, all of which will be paid in October. d. Selling and administrative expenses are budgeted at $10,000 for October. Of this amount, \$2,000 is for depreciation. e. Equipment costing $10,000 will be purchased for cash during October, and dividends totaling $3,000 will be paid during the month. Sale of Old Equipment $1,000. f. The company must maintain a minimum cash balance of $10,000. An open line of credit is available from the company's bank to bolster the cash position as needed. Required 1. Prepare a cash budget for October. Indicate in the financing section any borrowing that will be needed during October. 2. Prepare a schedule of expected cash collections for October. 3. Prepare a schedule of expected cash disbursement during October