Managerial accounting

You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations: a. The cash balance on December 1 is $43,200. b. Actual sales for October and November and expected sales for December are shown below. Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. Cash sales Sales on account October $ 76,200 520,000 November $ 70, 800 527,000 December $ 84, 400 649,000 c. Purchases of inventory will total $370,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $193,000, all of which will be paid in December d. Selling and administrative expenses are budgeted at $433,000 for December. Of this amount, $99,800 is for depreciation. e. A new web server for the Marketing Department costing $78,500 will be purchased for cash during December, and dividends totalling $18,500 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to bolster the cash position as needed. 2. Prepare a schedule of expected cash disbursements during December for merchandise purchases. ed Schedule of Expected Cash Disbursements Payments to suppliers: November purchases $ 135,100 X December purchases 111,000 Total cash payments $ 246,100 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. ded Ashton Company Cash Budget For the Month of December Beginning cash balance $ 43,200 Add collections from customers 624,000 Total cash available 667,200 Less cash disbursements: Payments to suppliers for inventory $ 246,100 X Selling and administrative expenses 333,200 New web server 78,500 Dividends paid 18,500 Total cash disbursements 676,300 Excess (deficiency) of cash available over (9,100) disbursements Financing: Borrowings 29,100 Repayments 0 Interest 0 Total financing 29,100 Ending cash balance $ 20,000 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted