Hawthorn Manufacturing needs to prepare a cash budget for December 2021. The cash balance at the beginning of December is $31,000. The actual sales for October and November and expected sales for December are: Information October ($) November ($) December ($) Cash Sales 13,000 10,500 14,800 Sales on Account 40,000 60,000 80,000 Total Sales 53,000 70,500 98,800 Sales on account are collected over a three-month period in the following ratio: 10% in the month of sale, 70% in the month following sale 18% in the second month following sale 2% remaining are uncollectible. Additional information includes: (a) Purchases of inventory will total $60,000 for December; 20% will be paid for in December. Accounts payable from Novembers inventory purchases is $38,000, all of which will be paid in December. (b) Selling and administrative expenses are budgeted at $25,000 for December; of which $5,000 is for depreciation. (c) Equipment costing $40,000 will be purchased for cash during December, and other miscellaneous cash expenses of $6,000 will be paid during December.

Required

Prepare the cash collections for the month of December and also a Cash Budget for December. Show all workings clearly (25 marks)