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In early July 2020, Leonora Kevi-Davies, the Chief Executive Officer (CEO) of Nutruvalu Foods, a Toronto based company dedicated to ensuring the purity and quality

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In early July 2020, Leonora Kevi-Davies, the Chief Executive Officer (CEO) of Nutruvalu Foods, a Toronto based company dedicated to ensuring the purity and quality of its diverse range of health food products, was considering the future of her family-owned business. The company had experienced great success since its Inception in 2011, but Nutravalu was now planning to expand its operations into other parts of the country Leonora knew expansion would be successful only if the company had a good cash management policy, and has asked Otto Semmler, the company's Chief Accountant (CA) for a cash budget for the current month (July 2020) Otto has coilected the following pieces of information in order to prepare the cash budget 2. The cash balance on July 1 is $45,000 b. Actual sales for May and June and expected sales for July are shown below. Sales on account are collected over a three-month period as follows: 15% collected in the month of sale 50% collected in the month following sale, and 15% collected in the second month following sale. The remaining 20% is uncollectible. May une July Cash sales $43.000 $80,000 $81,000 Sales on account $500 000 $525.000 $620,000 c. The company maintains a minimum cash balance of $24,000. An open line of credit is available from Ontario and Saskatchewan Banking Corporation (OSBC, the company's bank, to borrow from it needed. in order to maintain this minimum cash balance A new high-tech food commercial food processor contine 591.000 will be bought for cash during y, and employee bonuses totalling 5.300 will be paid during the month e Purchase of inventory will total $270,000 for July, 55% of months inventory purchases are paid during the month of purchase. The accounts payable remaining from June's inventory purchases total $178,000, all of which will be paid in my Selling and administrative expenses are budgeted at $397,000 for July of this amount $49,000 is for depreciation Required 1. Prepare a schedule of expected cash collections in l. 6.5 marks 2. Prepare a schedule of expected cash disbursements during July for merchandise purchases & marks 3. Prepare a cash budget forly. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be cold until the following month (August 95 marks

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