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:

sales:

July: $44,000

august: $74,000

September: $54,000

October: $49,000

COGS:

July: 25,600

august: 43,600

September: 31,600

October: 28,600

gross margin:

July: 18,400

august: 30,400

September: 22,400

October: 20,400

selling expense:

July: 8,400

august: 12,500

September: 8,900

October: 7,700

administrative expense:

July: 5,850

august: 7,600

September: 6,500

October: 6,400

total selling and admin:

July: 14,250

august: 20,100

September: 15,400

October: 14,000

Net operating income:

July: 4,150

august: 10,300

September: 7,000

October: 6,400

*includes $2,200 depreciation each month

b. sales are 20% for cash and 80% on credit

c. credit sales are collected over a three month period, with 10% collected in the month of sales, 70% in the month following sale and 20% in the second month following sale. may sales totalled $34,000 and June sales totalled $40,000

d. inventory purchases are paid within 15 days. therefore, 50% of a months inventory purchases are paid for in the month of purchase. the remaining 50% are paid in the following month. accounts payable for inventory purchases at June 30 total $13,700

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 $20,000

f. land costing $4,700 will be purchases in July

g. dividends of $1200 will be declared paid in september

h. the cash balance on June 30 is $8400; the company must maintain a cash balance of at least this amount at the end of each month

i. the company has an agreement with a local bank that allows it to borrow in increments of $1000 at the beginning of each month, up to a total loan balance of $40,000. the interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. the company would, as far as it is able, repay the loan pls accumulated interest at the end of the quarter.

1. prepare a schedule of expected cash collections for July, august, September and for the quarter in total.

2. a) prepare a merchandise purchases budget for July, august and september

b) prepare a schedule of expected cash disbursements for merchandise purchases for July, august, and September and for the quarter in total

3. prepare a cash budget for July, august, and September and for the quarter in total. (roundup borrowing and repayments to nearest whole dollar. repayments and interest should be indicated with a minus sign)