Exercise 9-26 Cash Budgeting The following information is from Tejas WindowTint's financial records Month Sales Purchases April $72,000 $42,000 May 66,000 48,000 June 60,000 36,000 July 78,000 54,000 Collections from customers are normally 70 percent in the month of sale, 20 percent in month following the sale, and 9 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 2 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for August are budgeted at $60,000, and sales for August are forecasted at $66,000 Cash disbursements for expenses are expected to be $14,400 for the month of August. The company's cash balance on August 1 was $22,000. the Required: Prepare the following schedules. 1. Expected cash collections during August. 2. Expected cash disbursements during August 3. Expected cash balance on August 31. Required: Your consulting firm has been hired by the bank president to make recommendations for improving its operations. Write a memorandum to the president defining and explaining the negative consequences of budgetary slack. Also discuss the bank's bonus system for the new accounts manager and how the bonus program tends to encourage budgetary slack