In September, NEE Company, a merchandising firm that sells one product, assembled the following information and estimates to prepare a budget for October. Expected sales are 32,000 units at a price of $34 per unit. The cost of merchandise purchases is expected to be $20 per unit. Selling and administrative expenses are estimated at $320,000, of which $15,000 is depreciation. The October 1 cash balance is expected to be $42,000.

NEE estimates that 80% of each month's sales are collected in the month of sale and the remaining 20% is collected in the month after sale. Expected sales for September are $920,000. The company pays for 10% of its merchandise purchases during the month of purchase, and pays the remaining

90% during the month following purchase. Merchandise purchases for September are estimated to be $736,000 and the purchase cost per unit is

$20. All other out-of-pocket expenses are paid for in cash.

Requirements

(a)	NEE plans to purchase 39,000 units of merchandise in October. Prepare a cash budget or statement of estimated cash flows for October for the company.
(b)	Prepare a budgeted income statement (for external reporting purposes) for the month ended October 31 for NEE Company.