During the last week of August, Oneida Company's owner approaches the bank for a $108,000 loan to be made on September 2 and repaid on November 30 with annual interest of 15%, for an interest cost of $4,050. The owner plans to increase the store's inventory by $60,000 during September and needs the loan to pay for inventory acquisitions. The bank's loan officer needs more information about Oneida's ability to repay the loan and asks the owner to forecast the store's November 30 cash position. On September 1, Oneida is expected to have a $4,000 cash balance, $129,600 of net accounts receivable, and $100,000 of accounts payable. Its budgeted sales, merchandise purchases, and various cash disbursements for the next three months follow. September $ 240,000 235,000 October $ 395,000 215,000 November $ 460,000 203,000 Budgeted Figures* Sales Merchandise purchases Cash payments Payroll Rent Other cash expenses Repayment of bank loan Interest on the bank loan 20,200 8,000 34,900 21,950 8,000 29,600 24,400 8,000 20,450 108,000 4,050 *Operations began in August; August sales were $180,000 and purchases were $120,000. The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 28% of credit sales is collected in the month of the sale, 43% in the month following the sale, 23% in the second month, 5% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $77,400 of the $180,000 will be collected in September, $41,400 in October, and $9,000 in November. All merchandise is purchased on credit; 50% of the balance is paid in the month following a purchase, and the remaining 50% is paid in the second month. For example, of the $120,000 August purchases, $60,000 will be paid in September and $60,000 in October. Required: Prepare a cash budget for September, October, and November. (Round your final answers to the nearest whole dollar.) Calculation of cash receipts from sales ...............-Collected in ------------------- November 30. Total Sales Uncollectible August September October November Accounts Rec. T L Credit sales from: August September October November $ 180,000 240,000 395,000 460,000 $ 1,275,000 I I I I I I Totals Calculation of cash payments for merchandise ------------------Paid in----- November 30. Total Purchases August September October November Accounts Pay. $ Purchases from: August September October November Totals 120,000 235,000 215,000 203,000 773,000 $ November ONEIDA COMPANY Cash Budget For September, October, and November September October Beginning cash balance $ 4,000 Cash receipts Collection on accounts receivable Receipts from bank loan Total cash available Cash payments: Payments on accounts payable Payroll Rent Other cash expenses Repayment on bank loan Interest on bank loan Total cash payments Ending cash balance