please show work (::

2. Cash Budget (20 points) The following budget information for the next two months have been assembled: November Sales Merchandise costs Operating expenses Capital expenditures $500,000 $120,000 $ 70,000 $ 50,000 December $650,000 $140,000 $ 80,000 The company expects to sell about 35% of its merchandise for cash. Of sales on account, 70% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. 60% of the merchandise costs are expected to be paid in the month in which they are incurred and the remaining in the following month. Depreciation of $5,000 is included in the operating expenses and $500 in the operating expenses is bad debt expense. Property taxes of $10,000 is estimated to be paid in December. Operating expenses are expected to be collected 40% in the month they are incurred and 60% to be paid in the following month. Beginning balances as of November 1 include: Cash of $30,000, Accounts Receivable of $60,000 Current liabilities as of November 1 are composed of accounts payable of $50,000 ($30,000 for merchandise purchases and $20,000 for operating expenses). Management desires a minimum cash balance of $60,000 at the end of November and December The company has an available credit line to borrow up to $100,000 Instructions: Prepare a monthly cash budget for November and December