Marie Marx, the management accountant at Go Jamdown is in the process of planning the companys cash needs for the third quarter of 2008. She has received the following information to assist in the preparation of the cash budget for the business.

Month Cash Sales Credit Sales Purchases Selling Expenses May $140000 $500000 $0 June $160000 $600000 $600000 July $180000 $700000 $675000 $75000 August $156000 $580000 $575000 $105000

September$160000 $600000 $600000 $85000

The following additional information is available :

i) An analysis of the records show that the collection of accounts receivable are settled, according to the following pattern, in accordance with the credit terms 10/30, n90: 50% collected in the month of sale 40% collected in the month following sale 10% collected two months following sale ii) Eighty percent (80%) of monthly purchases is paid in the month of purchase & the remaining 20% will be paid two months following the purchase. The credit terms of the suppliers is 5/30, n90. iii) During the month of August, a motor vehicle costing $120,000 will be purchased and paid for in cash. At the same time, an old motor vehicle, which has a net book value of $80,000, will be disposed of at a loss of $10,000. iv) Interest on investments in other companies amounting to $65,000 is expected to be collected in August 2008. v) Administrative expenses are expected to be $1,200,000 per annum, and will include depreciation expense of $20,000 per month. vi) Selling expenses and administrative expenses are paid in the month incurred. vii) Taxation of $125,000 has to be settled in September viii) Monthly rental is received from a tenant for factory space leased by Go Jamdown. The rental is $96,000 per annum and is received in the month that it is earned. ix) The cash balance on July 1, 2008 is expected to be an overdraft of $53,000. Required: (a) Prepare a debtors collection schedule for the quarter July to September. (b) Prepare a schedule of expected cash disbursements for purchases for each of the month July to September. (c) Prepare a cash budget, with a total column, for the quarter ending September 30. (d) Given that the company is required to maintain a minimum cash balance of $50,000, advise management as to three steps which may be taken to achieve the desired objective.