Developing a Cash Budget - Rock Fashions Rock Fashions financial projections for the sale of fashion clothing and purchase of stock are: Month Sales Purchases May $36,000 $10,000 June 52,000 40,000 July 48,000 36,000 August 54,000 24,000 September 60,000 38,000 Additional data: *All sales are on credit *Collections from customers are usually 50% in the month of sale, 40% in the month following the sale and 7% in the second month following the sale. The balance of the accounts receivable are expected to be uncollectible. *All purchases are for inventory on credit. Management takes full advantage of the 3% discount on purchases paid for by the 10th day of the following month. *Other operating expenses are estimated at $5,000 per month-which includes $500 depreciation. Payment of those expenses is made during the month. *During August Rock plans to pay $25,000 cash for improvements to fitting rooms. *During September $5,000 is expected to be received from the disposal of surplus furniture *Cash balance at 1 July was $10,000. Required: Using the above information, prepare the cash budget for each of the months July , August and September and the total for the quarter.