Problem 8-21 Schedules of Expected Cash Collections and Disbursements L08-2L084L08 You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations a. The cash balance on December 1 is $51,400 b. Actual sales for October and November and expected sales for December are as follows Cash sales Sales on account october November December $ 71,600 80,200 $ 88,600 $ 420,000 580,000 652,000 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 will total $287,000 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 $160,000, all of which will be paid in December d. Selling and administrative expenses are budgeted at $501,000 for December. Of this amount, $92,300 is for depreciation e. A new web server for the Marketing Department costing $113,500 will be purchased for cash during December, and dividends f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to totaling $10,000 will be paid during the month. increase its cash balance as needed. Required 1. Calculate the expected cash 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 paid until the following month. Complete this question by entering your answers in the tabs below Req 1 and 2Req 3 1. Calculate the expected cash collections for December 2. Calculate the expected cash disbursements for merchandise purchases for December. Total cash collections Total cash disbursements Req 1 and 2 Req 3 Req 1 and 2Req 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 paid until the following month. Ashton Company Cash Budget For the Month of December Beginning cash balance Add collections from customers Total cash available Less cash disbursements Payments to suppliers for inventory Selling and administrative expenses New web server Dividends paid