December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations:

1. The cash balance on December 1 is $51,800.
2. Actual sales for October and November and expected sales for December are as follows:

October

November

December

Cash sales

$

80,000

$

82,000

$

89,200

Sales on account

$

470,000

$

503,000

$

638,000

Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible.

1. Purchases of inventory will total $338,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $163,000, all of which will be paid in December.
2. Selling and administrative expenses are budgeted at $434,000 for December. Of this amount, $80,400 is for depreciation.
3. A new web server for the Marketing Department costing $98,000 will be purchased for cash during December, and dividends totaling $16,000 will be paid during the month.
4. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to increase its cash balance as needed.

Required:

1. Calculate the expected cash collections for December.

2. Calculate the expected cash disbursements for merchandise purchases for December.

3.cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.

1. Calculate the expected cash collections for December.

2. Calculate the expected cash disbursements for merchandise purchases for December.

Total cash collections

Total cash disbursements

Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.

Ashton Company

Cash Budget

For the Month of December

Beginning cash balance

Add collections from customers

Total cash available

Less cash disbursements:

Payments to suppliers for inventory

Selling and administrative expenses

New web server

Dividends paid

Total cash disbursements

Excess (deficiency) of cash available over disbursements

Financing:

Borrowings

Repayments

Interest

Total financing

Ending cash balance