Ojai Products, a distributor of organic beverages, needs a cash budget for September. The following information is available a. The cash balance at the beginning of September is $12,900 b. Actual sales for July and August and expected sales for September are as follows: July August September Cash sales Sales on account $6,300 4,300 9,700 21,100 26,100 37,100 Total sales 27,400 30,400 46,800 Sales on account are collected over a three-month period as follows: 10% collected in the month of sale, 65% collected in the month following sale, and 21% collected in the second month following sale. The remaining 4% is uncollectible. c. Purchases of inventory will total $24,800 for September. Thirty percent of a month's inventory d. Selling and administrative expenses are budgeted at $14,100 for September. Of this amount, $4,100 e. Equipment costing $18,200 will be purchased for cash during September, and dividends totaling f. The company maintains a minimum cash balance of S8,900. An open line of credit is available from purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $15,800, all of which will be paid in September is for depreciation. $3,900 will be paid during the month. th e company's bank to bolster the cash balance as needed. Required 1. Prepare a schedule of expected cash collections for September. (Do not round intermediate calculations.) Ojai Products Schedule of d Cash Collections September cash sales July sales August sales September sales Total cash collections 2. Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations.) Ojai Products Schedule of Expected Cash Dis nts Payments to suppliers: August purchases Total cash payments 2. Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations.) Ojai Products Schedule of Cash Di nts Payments to suppliers: August purchases Total cash payments 3. Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. Ojai Products Cash Budget For the Month of September Cash balance, September 1 Add cash receipts: Total cash available before current financing Less disbursements: Payments to suppliers for inventory Selling and administrative Equipment purchases Dividends paid Excess (deficiency) of cash available over disbursements Financing: Repayments Interest Total financing Cash balance, September 30
