Problem $8-21($Algo$)$ Schedules of Expected Cash Collections and Disbursements $[$LO$8-2,$ LO$8-4,$ LO$8-8]$

Ashton Company, a distributor of exercise equipment, is preparing a cash budget for December. It provided the following information:

a$.$ The cash balance on December $1$ is $$51,200.$

b$.$ Actual sales for October and November and expected sales for December are as follows:

Sales on account are collected over a three$-$month period as follows: $20\%$ collected in the month of sale, $60\%$ collected in the

month following sale, and $18\%$ collected in the second month following sale. The remaining $2\%$ are uncollectible.

c$.$ Purchases of inventory will total $$346,000$ for December. Thirty percent of a month's inventory purchases are paid during the month

of purchase. The accounts payable remaining from November's inventory purchases total $$177,000,$ all of which will be paid in

December.

d$.$ Selling and administrative expenses are budgeted at $$473,000$ for December. Of this amount, $$75,000$ is for depreciation.

e$.$ A new web server for the Marketing Department costing $$72,000$ will be purchased for cash during December, and dividends

totaling $$17,500$ will be paid during the month.

f$.$ The company maintains a minimum cash balance of $$20,000.$ An open line of credit is available from the company's bank to

increase its cash balance as needed.

Required:

For December:

Calculate the expected cash collections.

Calculate the expected cash disbursements for merchandise purchases.

Prepare a cash budget. Indicate in the financing section any borrowing needed during the month. Assume any interest will not be

paid until the following month.

Complete this question by entering your answers in the tabs below.

Required $1$

and $2$

Calculate the expected cash collections for December.

Calculate the expected cash disbursements for merchandise purchases for December.

Total cash collections

Cash disbursements for merchandise purchases