PROBLEM 7-4 (Preparing a Cash Budget) The following data has been gathered from Yerenica Co. to assist in the preparation of a cash budget for a the fourth quarter of 2020. i. The projected sales and the projected direct material purchases. Sales Purchase Month (in dollar amount) (in kg) August 22,000 3.000 September 22,800 3.200 October 25,600 3,400 November 26,000 3.800 December 28,400 4,000 Each month, 30% of sales are for cash and the remaining are on credit. The collection pattern for credit sales is 40% in the month of sale, 35% in the following month, and 20% in the second month following the sale. The company records bad debt expenses every month. ll. The company purchased direct materials on account. The purchase price per kg is $7. Company pays 70% of accounts payable in the month of purchase and gets a 5% discount. The remaining is paid for in the following month. iv. The company borrowed $80,000 from the bank since January 1, 2018. The borrowing period was 5 years. The annual interest rate was 10%. The company paid interest expenses quarterly. v. On October 30, new supplies will be purchased for $8,000 in cash. vi. The cash balance on September 30 is $25,000 21 Sweden vil. A minimum cash balance is required for the end of each quarter of $25,000. Money can be borrowed $10,000 on the next beginning of the quarter, interest is 10% per year and paid annually. Required: Prepare a cash budget for the fourth quarter of 2020. Give a supporting schedule that details the cash collections from sales and the cash payment for direct materials purchase