OMB Ltd. 's September balance sheet contains the following information: Cash $ 30,000 (de) Accounts receivable 100,800 (d) Allowance for doubtful accounts 2,240 (er) Merchandise inventory 21,000 (dr) Management has designated $30,000 as the firm's minimum monthly cash balance. Other information about the firm and its operations is as follows: Sales revenues of $280,000, $336,000, and $250,000 are expected for October, November, and December, respectively. All goods are sold on account, 2. The collection pattern for accounts receivable is 55% in the month of sale, 44% in the month following the month of sale, and 1% uncollectible, which is set up as an allowance 1 3. 3. Cost of goods sold is 60% of sales revenues. 4 Manageinent's target ending balance of merchandise inventory is 10% of the current month's sales. All accounts payable for inventory are paid in the month of purchase. 6. Other monthly expenses are $37,800, which includes $2,800 of amortization but does not include bad debt expense 7. Borrowings and investments can only be made in $5,000 increments at the end of a month. Interest is charged at the rate of 10% per year; Interest will be earned at the rate of 8% per year Required N. 8. Prepare a cost of purchases schedule for October and November b. Prepare the cash budgets for October and November including the effects of financing (borrowing or investing) 6 10