Hamby Corporation is amerchandising company that is preparing a master budget for the third quarter of the calendar year. The company's balance sheet as of June 30th is shown below:

Hamby CorporationBalance SheetJune 30AssetsCash$75,000Accounts receivable140,000Inventory66,500Plant and equipment, net of depreciation227,000Total assets$508,500Liabilities and Stockholders' EquityAccounts payable$88,000Common stock311,000Retained earnings109,500Total liabilities and stockholders' equity$508,500

The company managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $380,000, $400,000, $390,000, and $410,000, respectively.
2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
3. Each month's ending inventory must equal 25% of the cost of next month's sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
4. Monthly selling and administrative expenses are always $52,000. Each month $7,000 of this total amount is depreciation expense and the remaining $45,000 relates to expenses that are paid in the month they are incurred.
5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

How much is the Company's expected cash collections in the month of August?

Multiple Choice

• $387,000
• $260,000
• $140,000
• $247,000