Kat Ltd.'s September balance sheet contains the following information Cash Accounts receivable. Allowance for doubtful accounts Merchandise inventory $ 53,700 (dr) 182,700 (dr) 3,700 (cr) 29,400 (de) Management has designated $53,700 as the firm's minimum monthly cash balance. Other information about the firm and its operations is as follows: a. Sales revenues of $512,000, $609,000, and $452,000 are expected for October, November, and December, respectively. All goods are sold on account. b. The collection pattern for accounts receivable is 60% in the month of sale, 39% in the month following the month of sale, and 1% uncollectible, which is set up as an allowance. cCost of goods sold is 60% of sales revenues. d Management's target ending balance of merchandise inventory is 10% of the current month's budgeted cost of goods sold. e. All accounts payable for inventory are paid in the month of purchase. Other monthly expenses are $68,400, which includes $4,850 of depreciation and 60,650 of bad debt expense. g. In the event of a shortfall, the company borrows money. In contrast, in the event of excess cash, the company invests in short-term investments Borrowings and investments are assumed to be made at the end of a month in increments of $8,750. h. Interest on borrowings is 10% per year, payable every quarter, on the accumulated amount of the loan; similarly, interest earned on investments is 8% per year on the accumulated investments and is received every quarter. Investments can be matured and the principal amount redeemed in June or December of a year. Required: 1. Prepare a merchandise purchases budget for October and November Kat Ltd. Merchandise Purchases Budget October November December Add Desired ending inventory 2. Prepare the cash budgets for October and November. Including the effects of financing (borrowing or investing). Interest is earned or paid quarterty. (Any "Repayments" and "Interest" should be indicated by a minus sign. Leave no cells blanke - be certain to enter "0" wherever required.) Katti Cash Budget October November Add: Collections from sales Total cash available Deduct: Disbursements: 0 0 Total disbursements Excess (deficiency of cash Financing Investments Borrowings Repayments Interest Total financing