Janus Products, Inc. is a merchandising company that sells binders, paper, and other school supplies. The company is planning its cash needs for the third quarter. In the past, Janus Products has had to borrow money during the third quarter to support peak sales of back-to-school materials, which occur during August. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for July to October are as follows August September October $53,000 $83,000 $63,000 $58,000 32,200 Sales Cost of goods sold Gross margin Selling and administrative expenses: 29,200 47,200 35,200 23,800 35,800 27,800 25,800 Selling expense Administrative expense* 11,100 6,300 9,800 7,400 14,300 8,600 8,500 22,800 $ 6,400 13,000 7,200 15,800 10,600 $10,000 Total selling and administrative expenses 17,400 17,200 Net operating income "Includes $2,650 depreciation each month. Sales are 20% for cash and 80% on credit. Credit sales are collected over a three-month period, with 10% collected in the month of sale, 70% in the month following sale, and 20% in the second month following sale. May sales totaled $43,000, and June sales totalled $49,000 Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases is paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable for inventory purchases at June 30 total $18,200 c. d. e. The company maintains its ending inventory levels at 75% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $24,500 f. Land costing $5,150 will be purchased in July g. Dividends of $1,650 will be declared and paid in September h. The cash balance on June 30 is $9,300; the company must maintain a cash balance of at least this amount at the end of each month