During the last week of August, Oneida Companys owner approaches the bank for a $108,500 loan to be made on September 2 and repaid on November 30 with annual interest of 13%, for an interest cost of $3,526. 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 $4,000 cash balance, $130,900 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.

Budgeted Figures* September October November Sales $ 250,000 $ 435,000 $ 450,000 Merchandise purchases 220,000 220,000 191,000 Cash payments Payroll 19,500 21,950 24,600 Rent 10,000 10,000 10,000 Other cash expenses 34,800 30,800 20,950 Repayment of bank loan 108,500 Interest on the bank loan 3,526

*Operations began in August; August sales were $170,000 and purchases were $120,000. The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 23% of credit sales is collected in the month of the sale, 47% in the month following the sale, 19% in the second month, 7% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $79,900 of the $170,000 will be collected in September, $32,300 in October, and $11,900 in November. All merchandise is purchased on credit; 80% of the balance is paid in the month following a purchase, and the remaining 20% is paid in the second month. For example, of the $120,000 August purchases, $96,000 will be paid in September and $24,000 in October. Required: Prepare a cash budget for September, October, and November