Prepare a cash budget for September, October, and November for Muir Company. Show the calculation and explanation

Problem 2A Preparation of cash budgets (for three periods) C3 P2 excel mhhe.com/wildMA2e During the last week of August, Muir Company's owner approaches the bank for a SIOO,OOO loan to be made on September 2 and repaid on November 30 with annual interest of 12%, for an interest cost of $3,000. The owner plans to increase the store's inventory by $80,000 during September and needs the loan to pay for inventory acquisitions. The bank's loan officer needs more information about Muir's abil- ity to repay the loan and asks the owner to forecast the store's November 30 cash position. On September l, Muir is expected to have a $4,000 cash balance, $152,000 of accounts receivable, and $115,000 of Chapter 3 Master Budgets and Performance Planning accounts payable. Its budgeted sales, merchandise purchases, and various cash disbursements for the next three months follow. Fl, Edit F.t He 2 3 4 5 6 7 8 9 Budgeted Figures* Sales Merchandise purchases Cash disbursements Payroll Rent . Other cash expenses . Repayment of bank loan Interest on the bank loan . September $350,000 275,000 25,000 12,000 38,000 October $400,000 185,000 30,000 12,000 29,000 November $425,000 180,000 35,000 12,000 24,500 100,000 3.000 Operations began in August; August sales were and purchases were The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 24% of credit sales is collected in the month of the sale, 44% in the month following the sale, 21% in the second month, 8% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $88,000 of the $200,000 will be collected in September, $42,000 in October, and S 16,000 in November. All merchandise is purchased on credit; 85% of the balance is paid in the month following a purchase, and the remaining is paid in the second month. For example, of the $115,000 August purchases, $97,750 will be paid in September and $17,250 in October. Required Prepare a cash budget for September, October, and November for Muir Company. Show supporting calculations as needed. Check cash balance: September. $ October, $73,250; November, $67,750