During the last week of August, Oneida Companys owner approaches the bank for a $100,000 loan to be made on September 2 and repaid on November 30 with annual interest of 10%, for an interest cost of $2,500. The owner plans to increase the stores inventory by $60,000 during September and needs the loan to pay for inventory acquisitions. The banks loan officer needs more information about Oneidas ability to repay the loan and asks the owner to forecast the stores November 30 cash position. On September 1, Oneida is expected to have a $4,500 cash balance, $144,400 of net accounts receivable, and $100,000 of accounts payable. Its budgeted sales, merchandise purchases, and various cash payments for the next three months follow.

*Operations began in August; August sales were $190,000 and purchases were $115,000. The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 24% of credit sales is collected in the month of the sale, 44% in the month following the sale, 21% in the second month, 8% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $83,600 of the $190,000 will be collected in September, $39,900 in October, and $15,200 in November. All merchandise is purchased on credit; 90% of the balance is paid in the month following a purchase, and the remaining 10% is paid in the second month. For example, of the $115,000 August purchases, $103,500 will be paid in September and $11,500 in October. Required: Prepare a cash budget for September, October, and November.

September $ 230,000 235,000 October $ 475,000 220,000 November $ 500,000 199,000 Budgeted Figures* Sales Merchandise purchases Cash payments Payroll Rent Other cash expenses Repayment of bank loan Interest on the bank loan 19,700 9,000 34,200 22,100 9,000 29,800 23,900 9,000 21,300 100,000 2,500 Prepare the calculation of cash receipts from sales and calculation of cash payments for merchandise. Calculation of cash receipts from sales -Collected in--- Total Sales Uncollectible August September October November 30. November Accounts Rec. Credit sales from: $ 190,000 August September October 230,000 475,000 November 500,000 Totals $ 1,395,000 Calculation of cash payments for merchandise ----Paid in----- November 30. Total Purchases August September October November Accounts Pay. Purchases from: $ 115,000 $ 0 August September 235,000 October 220,000 November 199,000 0 Totals $ 769,000 Prepare a cash budget for September, October, and November. (Round your final answers to the nearest whole dollar.) ONEIDA COMPANY Cash Budget For September, October, and November September October Beginning cash balance $ 4,500 Cash receipts November Total cash available Cash payments: Total cash payments 0 0 0 Ending cash balance