LO3 P22-36. Cash Budget Cash budgeting for Nichole Mango, a merchandising firm, is performed on a quarterly basis. The company is planning its cash needs for the third quarter of 2017, and the following information is available to assist in preparing a cash budget. Budgeted income statements for July through October 2017 are as follows $28,000 (15,000) 13,000 August September October $32,000 (17,000) 15,000 $40,000 (21,000) 19,000 Less other expenses 5,200 3,300 3,600 4,000 4,400 5,000 (9,000) $4,000 4,200 (8,600) $ 6,400 4,600 (9,800) $ 9,200 Module 22 Operational Budgeting and Profit Planning Additional information follows: 1. Other expenses, which are paid monthly, include $2,000 of depreciation per month 2. Sales are 40 percent for cash and 60 percent on credit 3. Credit sales are collected 25 percent in the month of sale, 65 percent one month after sale, and 10 4. Merchandise is paid for 50 percent in the month of purchase; the remaining 50 percent is paid in the 5. The company maintains its ending inventory levels at 20 percent of the cost of goods to be sold in 6. An equipment note of $6,000 per month is being paid through August percent two months after sale. May sales were $16,000, and June sales were $17,000 following month. Accounts payable for merchandise at June 30 totaled S7,000 the following month. The inventory at June 30 is $2,200 7. The company must maintain a cash balance of at least $6,000 at the end of each month. The cash balance on June 30 is $6,100 8. The company can borrow from its bank as needed. Borrowings and repayments must be in multiples of $100. All borrowings take place at the beginning of a mnth, and all repayments are made at the end of a month. When the principal is repaid, interest on the repayment is also paid. The interest rate is 12 percent per year Required a. Prepare a monthly schedule of budgeted operating cash receipts for July, August, and September b. Prepare a monthly purchases budget and a schedule of budgeted cash payments for purchases for July, August, and September c. Prepare a monthly cash budget for July, August, and September. Show borrowings from the com- pany's bank and repayments to the bank as needed to maintain the minimum cash balance