Question 3 (10 marks) BBG Limited is now in the process of preparing its cash budget for October. The nning cash balance is $44,000. Budgeted cash receipts total $318,000 and budgeted cash disbursements total $344,000. The desired ending cash balance is $60,000. BBG can borrow up to $500,000 from Hang Seng Bank whenever they are in need of cash, with interest not due until the following month. Required: Prepare the BBG's cash budget for October in good form. Question 4 (14 marks) Cloudy Limited is a merchandising company that is preparing a budget for the three- month period ended September 30. The following information is available. Budget Income Statement July Sales $200,000 Cost of goods sold 120,000 Gross margin 80,000 Selling and administrative expenses 30,000 Net operating income $50,000 August $220,000 132,000 88,000 33.000 $55,000 September $260,000 156.000 104,000 39,000 $65.000 Additional information:- Inventory at 30 June Account receivable at 30 June Account payable at 30 June $80,000 $72,000 $102,600 Budgeting Assumption:- 1) Sixty percent of Sales are cash sales and 40% of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale and the remaining 80% are collected in the month subsequent to the sale. 2) Budgeted sales for October are $280,000 3) Each month's ending merchandising inventory should equal $20,000 plus 50% of the next month's cost of goods sold. 4) Depreciation expense is $2,000 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred. Required: 1) Calculate the expected cash collection for July, August and September. 2) Calculate the budgeted merchandise purchases for July, August and September --END