Exercise 8-22 Cash Budget LeeAnn Ortiz owns a retail store that sells new and used sporting equipment, LeeAnn hap requested a cash budget for October. After examining the records of the company, you find the following: a. Cash balance on Ocrober 1 is $980. b. Actual sales for August and September are as follows: c. Credit sales are collected over a three-month period: 45 percent in the month of iale, 36 percent in the next month, and 16 percent in the second month after the sale. The remaining sales are uncollectible. d. Inventory purchases average 70 percent of a month's tocal sales. Of those purchases 40 percent are paid for in the month of purchase. The remaining 60 percent are paid forin the following month. c. Salaries and wages total $4,000 per month. f. Rent is $3,150 per month. g. Taxes to be paid in Ocrober are $1,635. h. LeeAnn usually withdraws $3,500 each month as her salary. i. Advertising is $1,500 per month. j. Other operating expenses total $3,700 per month. k. Internet and telephone fees are $320 per month. LeeAnn tells you that she expects cash sales of $5,200 and credit sales of $63,000 for October. She likes to have $3,000 on hand at the end of the month and is concerned abour the potential October ending balance. Required: 1. Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. (Round all amounts to the nearest dollar.) 2. Did the business meet LeeAnn's desired ending cash balance for October? Assuming that the owner has no hope of establishing a line of credit for the business, what recommenda. tions would you give the owner for meeting the desired cash balance? 3. Explain how each of the four data analytic types-descriptive, diagnostic, predictive. or prescriptive - can be used in LeeAnn's budgeting process. (See Exhibits 2.5 and 2.6. pp. 37,40 , for a review of data analytic types.)