Problem 22-6AA (Algo) Merchandising: Preparation of cash budgets (for three periods) LO P4 Oneida Company's operations began in August. August sales were $200,000 and purchases were $115,000. The beginning cash balance for september is $33,500. Oneida's owner approaches the bank for a $98,500 loan to be made on September 2 and repaid on November 30. The bank's loan officer asks the owner to prepare monthly cash budgets. Its budgeted sales, merchandise purchases, and cash payments for other expenses for the next three months follow. Budgeted Sales Merchandise purchases Cash payments Salaries Rent Insurance Repayment of loan Interest on loan November $ 450,000 196,000 September $ 230,000 220,000 October $ 475,000 200,000 30,200 30,200 30,200 9,000 9,000 9,000 4,600 4,600 4,600 98,500 985 985 985 All sales are on credit where 78% of credit sales are collected in the month following the sale, and the remaining 22% collected in the second month following the sale. All merchandise is purchased on credit; 88% of the balance is paid in the month following a purchase, and the remaining 12% is paid in the second month. Required: Prepare the following for the months of September, October, and November. 1. Schedule of cash receipts from sales. 2. Schedule of cash payments for direct materials. 3. Cash budget.