Company X has the following income statement for the month ending September.

Sales 42,000

Cost of Goods Sold:

Beginning Inventory 6,000

Purchases 37,800

Cost of Goods Available for sale 43,800

Less: Ending Inventory (14,400)

Cost of Goods Sold 29,400

Gross Profit 12,600

Operating Expenses 10,500

Operating Profit 2,100

Sales are made on credit and collected as follows:

60 per cent in the month after the sale is made and

35 per cent in the second month after the sale

Purchases and Operating Expenses are paid as follows:

80 per cent purchased or the cost incurred

Cash on hand at 31 August is estimated to be $40,000. Collections of 31 August accounts receivable was estimated to be $24,000 and payments of accounts payable to be $34,000.

Prepare a cash budget for September