Question 2 (25 marks) Murphy manufactures and sells informal coats. It is ready to begin its fourth quarter, in which they have their highest sales. The company has approached the Bank for a loan, and the Bank has asked the corporation to submit a cash budget for the fourth quarter. The following data has provided to you: a. At the beginning of the fourth quarter the cash balance will be $24,000, the company must maintain a cash balance of at least $10,000 at the end of each month. b. Sales figures is given below Month Total Cash collection from Sales October 2021 $66,000 November 2021 $94,000 December 2021 $115,000 c. Budgeted raw materials purchase and expenses is given below October November December Materials Purchase 72,000 65,000 68,000 Salary Expense 21,000 22,000 20,000 Utilities Expense 2,000 2,000 1,900 Depreciation 3,000 3,000 3,000 Expense Rent Expense 3,200 3,500 3,000 d. Rent is always paid in the following month. e. Rent due for the month of September to be paid in October is 2,000 $ f. The company paid a dividend of $2,600 in December. g. They bought a computer for $2,800 and paid in cash in October a. The company has an agreement with a local bank that allows it to borrow at the beginning of each month. The interest rate on these loans is 5% per month. The company would repay the loan plus accumulated interest at the end of the quarter. 5 Required: Prepare 1. Prepare a cash budget for the fourth quarter. 4