nus Products, Inc. is a merchandising company that sells binders, paper, and other school supplies. The company is planning its cash eeds for the third quarter. In the past, Janus Products has had to borrow money during the third quarter to support peak sales of ack-to-school materials, which occur during August. The following information has been assembled to assist in preparing a cash Ludget for the quarter Budgeted monthly absorption costing income statements for July to October are as follows: July $57,000 30,000 26,200 August $87,000 48,800 38.200 September $67,000 36.000 30.200 October $62,000 33.000 28.200 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expense Administrative expense Total selling and administrative expenses Net operating income 12,300 6.500 15.100 5.900 24.000 $14,200 71,600 10,200 7.000 18,000 $12,200 $ 7,400 $11,600 "Includes $2,850 depreciation each month, b Sales are 20% for cash and 80% on credit. c. Credit sales are collected over a three-month period, with 10% collected in the month of sale, 70% in the month following sale, and 20% in the second month following sale. May sales totalled $47.000, and June sales totalled $53,000 d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% are paid in the following month. Accounts payable for inventory purchases at June 30 total $20.200 "Includes $2,850 depreciation each month. b. Sales are 20% for cash and 80% on credit c. Credit sales are collected over a three-month period, with 10% collected in the month of sale, 70% in the month following sale, 20% in the second month following sale. May sales totalled $47.000, and June sales totalled $53,000 d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% are paid in the following month. Accounts payable for inventory purchases at June 30 total $20.2 e. The company maintains its ending inventory levels at 75% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $26,500 f. Land costing $5,350 will be purchased in July g. Dividends of $1,850 will be declared and paid in September h. The cash balance on June 30 is $9700, the company must maintain a cash balance of at least this amount at the end of each month The company has an agreement with a local bank that allows it to borrow in increments of $1.000 at the beginning of each month up to a total loan balance of $40,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able repay the loan plus accumulated interest at the end of the quarter b. A schedule of expected cash disbursements for merchandise purchases for July, August, and September and for the quarter in total JANUS PRODUCTS, INC. Schedule of Expected Cash Disbursements July August September Qulirter Accounts payable, June 30 July purchases August purchases September purchases Total cash disbursements $ $ 0 $ 0 $ 0 3. Prepare a cash budget for July, August, and September and for the quarter in total. (Roundup "Borrowing" and "Repayments" answers to the nearest whole dollar amount. Any "Repayments" and "Interest" should be indicated by a minus sign. Leave no celle blank - be certain to enter "0" wherever required.) JANUS PRODUCTS, INC Cash Budget For the Quarter Ended September 30 Jaly August September Quarter 0 0 0 Total cash available Deduct Disbursements O 0 0 0 0 Total disbursements Exconn (deficiency) of cash available over disbursements 0 Total disbursements Excess (deficiency) of cash available over disbursements Financing Total financing 0 0