QUESTION 3 [20 Marks] You are hired by Rift Raft Corporation (RRC) for a job opportunity in the accounting department. The Chief Financial Officer (CEO) instructs you to prepare a monthly cash budget for the three month period September, October and November 2017. You are presented with the following budget information: Revenues Manufacturing costs Selling and administrative expenses Capital expenditures September 2017 October 2017 November 2017 $480,000 $600,000 $500,000 110,000 140,000 150,000 60.000 100,000 120,000 150,000 Other data: i. The company expects to sell about 15% of the merchandise for cash, and the remaining sales are on account. ii. Sales on account, 75% are expected to be collected in the month following the sale and the remainder in the following month. iii. Depreciation expense represent $16,000 of the estimated monthly manufacturing costs. Of the remainder of the manufacturing costs, 70% are expected to be paid in the month in which they are incurred and the balance in the following month. iv. Current assets as of August 31 include: a) Cash of $30,000; b) Marketable securities of $105,000; and c) Accounts receivable of $637,500. V. Sales on account for July and August were $150,000 and $600,000, respectively vi. Current liabilities as of August 31 include: a) $100,000, 10%, 90-day note payable due on November 30; and b) $16,000 of accounts payable incurred in August for manufacturing costs. vii. All seling and administrative expenses are paid in cash in the period they are incurred. vili. A dividend of $7,500 is expected to be received in October ix. An estimated income tax payment of $60,000 will be made in September X. Rift Raft's regular quarterly dividend of $18,500 is expected to be declared in October and paid in November. xi. Management desires to maintain a minimum cash balance of $35,000. Required Prepare a schedule of expected cash collections for the three months. [7 Marks) Prepare a schedule of expected cash payments for the three months. [5 Marks) Prepare the quarter (September, October and November) monthly cash budget. [8 Marks]