Monthly Cash Budget Collections in December from customers:

Payments on account for merchandise purchases:

Payment of operating expenses: Cash required at time of computer purchase:

Grove, Inc. is a wholesaler for its only product, deluxe wireless electric drills, which sell for $$88$ each and cost Grove $$53$ each. On December $1,$ Grove's management requested a cash budget for December. The

following selected account balances at November $30,$ were gathered by the accounting department:

Actual sales for the months of October and November were $20,000$ and $30,000$ units, respectively. Projected unit sales for December and January are $50,000$ and $40,000,$ respectively. Experience indicates that $50\%$

of sales should be collected in the month of sale, $30\%$ in the month following sale, and the balance in the second month following sale. Uncollectible accounts, returns, and allowances are negligible.

Planned purchases should provide ending inventories equal to $30\%$ of next month's unit sales volume. Approximately $70\%$ of the purchases are paid for in the month of purchase and the balance in the following

month.

Monthly operating expenses are budgeted at $$7\mathrm{.}10$ per unit sold plus a fixed amount of $$189,000$ including depreciation of $$81,000.$ Except for depreciation, $60\%$ of operating expenses are paid in the month

incurred and the balance in the following month. Interest expense is included in operating expenses.

Special anticipated year$-$end transactions include the following:

Declaration of a $$22,500$ cash dividend to be paid $2$ weeks after the December $20$ date of record.

Sale of one$-$half of the marketable securities held on November $30$ a gain of $$21,000$ is anticipated.

Pay off the note payable due December $31.$

Trade$-$in of an old computer originally costing $$675,000$ and now having accumulated depreciation of $$540,000$ at a gain of $$157,500$ on a new computer costing $$1,380,000.$ Sufficient cash will be paid at the

time of trade$-$in so that only $50\%$ of the total price will have to be financed.

Grove's treasurer has a policy of maintaining a minimum month$-$end cash balance of $$135,000$ but wants to raise this to $$225,000$ at December $31.$ She has a standing arrangement with the bank to borrow any

amount up to a limit of $$450,000.$

Prepare a cash budget for Grove, Inc., for December.

Collections in December from customers: