On September 30, the Parker Corporation had a balance of $50,500 in its cash account.

Additional information:

• Actual sales:

August$180,000

September200,000

• Budgeted sales:

October$195,000

November210,000

• 10% of each month's sales are cash sales.Of the remaining credit sales, collections are 70% in the month of the sale and 25% in the following month.The remaining 5% is uncollectible.
• Inventory costs average 75% of sales (i.e., October sales will require $146,500 of inventory and November sales will require $157,500 of inventory).
• Monthly purchases of inventory are budgeted at 100% of next month's projected inventory needs.Thirty percent of the purchases are paid for in the month of purchase, with the remaining 70% paid in the month following purchase.Inventory purchases in September totaled $117,000.
• Selling and administrative expenses are $50,000 per month.Of this amount, $12,000 is depreciation.
• The company plans to purchase a new piece of production equipment costing $40,000 at the end of October.
• All obligations, except inventory purchases, are paid in the month incurred.
• Parker desires a minimum cash balance of $50,000.Short-term borrowing in increments of $1,000 is available to cover any shortfalls.Borrowings are made at the beginning of the month and repayments are at the end of the month.Interest is 18% per year, and interest payments must be made whenever there is a principal repayment.
• Dividends of $10,000 were declared in September and will be paid in October.

REQUIRED:

Prepare cash budget forOctober, consisting of cash receipts, disbursements and any borrowing/repayment, such that the minimum cash balance is not less than $50,000.If an amount is 0, you must enter 0; do not leave the cell blank.ENTER ALL AMOUNTS IN WHOLE DOLLARS.

October

Beginning Cash Balance...................

Collections from Sales .....................

Total Cash Available....................

Less Disbursements:

Inventory Purchases.......................

Selling & Administrative Expenses ....

Income Taxes Paid........................

Equipment (Sales) Purchases...........

Dividends Paid..............................

Total Cash Disbursements............

Excess (Inadequacy) of Cash...........

Minimum Cash Balance................

Cash Available (Needed)...................

Financing:

Borrowing....................................

Repayments.................................

Interest.......................................

Total Financing...........................

Ending Cash Balance.......................