Problem 8-21 (Algo) Schedules of Expected Cash Collections and Disbursements [LO8-2, LO8-4, LO8-8] You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following informetion is avallable about the company's operations: a. The cash balance on December 1 is $45,400. b. Actuol soles 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% is uncollectible. c. Purchases of inventory wilt total $356,000 for Decembet. Thity percent of a month's inventory purchases are poid during the month of purchase. The accounts peyable remaining from November's inventory purchases total \$164,000, all of which will be paid in December. d. Selling and administrative expenses are budgeted at $431,000 for Decembet. Of this amount, $54,200 is for depreciation. e. A new web server for the Marketing Department costing $120,500 will be purchased for cash during December, and dividends totaling $13,500 will be paid during the month, f. The compony maintoins a minimum cash balance of $20,000. An open line of credit is avallable from the company's bank to increase its cash baiance as needed. Required: 1. Calculate the expected cosh collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be poid until the following month. totalling $13,500 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is avaliable from the company's bank to increase its cash balance as needed. Requlred: 1. Calculate the expected cash collections for December, 2. Calculate the expected cash disbursements for merchandise purchases for December. 3. Prepore a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assur that any interest will not be paid until the following month. Complete this question by entering your answers in the tabs below. 2. Calculate the expected cash collections for December. 2. Calculate the expectod cash disbursements for merchandise purchases for December. Complete this questlon by entering your answers In the tabs below. Prepare a cash budget for December. Indicate In the financing section any borrowing that will be needed during the month. Assume that any Interest will not be paid until the following month
