Question 5 (25 Marks) Letsatsi Company is a merchandising company that sells a single product. The company's inventories, production and sales in units for the next three months have been forecasted as follows: October November December Beginning Inventory.. 10 000 10 000 10 000 Merchandise Purchases....... 60 000 70 000 35 000 Sales.... 60 000 70 000 40 000 Ending Inventory... 10 000 10 000 5 000 Units are sold for R12 each. One fourth of all sales are paid for in the month of sale and the balance is paid in the following month. Accounts receivable at September 30 totalled R450 000 Merchandise is purchased for R7 per unit. Half of the purchases are paid for in the month of the purchase and the remainder is paid in the month following purchase. Selling and administrative expenses are expected to total R120 000 each month. One half of these expenses will be paid in the month in which they are incurred and the balance will be paid in the following month. There is no depreciation. Accounts payable at September 30 totalled R290 000 Cash at September 30 totalled R80 000 A payment of R300 000 for purchase of equipment is scheduled for November and a dividend of R200 000 is to be paid in December. Required: 1. Prepare a schedule of expected cash collections for each of the months of October, November and December. 2. Prepare a schedule showing expected cash disbursements for merchandise purchases and selling and administrative expenses for each of the months October, November and December. 3. Prepare a cash budget in good form for each of the months of October, November and December. There is no minimum required ending cash balance