The following table lists the data from the budget of Wood Products, Inc. 40% the companys sales are for cash on the nail; the other 60% are paid for with a one-month delay. The company pays all its credit purchase with a one-month delay. Credit purchases in June were $360,000, and total sales in June were $1,050,000.

Wood products

Sales, purchase, and other budgets

	June	July	Aug	Sept
Total sales	$1,050,000	$1,475,800	$1,783,500	$1,396,300
Purchases of material
- for cash		306,192	306,064	263,112
- for credit	360,000	459,288	534,096	394,668
Selling and admin. expenses		348,600	375,620	337,150
Income taxes		102,000	102,000	102,000
Dividends		30,000	30,000	30,000
Equipment purchase		200,000	0	0

We make these assumptions to simplify the analysis:

* Wood Products has an open line of credit with its bank, which can be used as needed to bolster the cash position.

* The company desires to maintain a $120,000 minimum cash balance at the end of each month. Therefore, borrowing must be sufficient to cover the cash shortfall and to provide for the minimum cash balance of $120,000.

* All borrowings and repayments must be in multiples of $1,000 amounts, and interest is 7 percent per annum.

* Interest is computed and paid on the principal during the borrowing period.

* All borrowings take place at the beginning of a month, and all repayments are made at the end of a month. The company will take a loan at the beginning of July, and should be able to pay off the loan at the end of August with its cash surplus. You have to figure out the amount of loan taken at the beginning of July.

* The company pays the selling and administrative expenses, income taxes, dividends, and pays for equipment purchase at the end of a month.

Please complete this cash budget.

D E F G August $ 1,783,500 September $ 1,396,300 X fx B C Wood Products Sales, purchase, and other budgets June July 4 Total sales $ 1,050,000 $ 1,475,800 5 Purchases of material 6 For cash 306,192 7 For credit 360,000 459,288 8 Selling and admin. expenses 348,600 9 Income taxes 102,000 10 Dividends 30,000 11 Equipment purchase 200,000 1 Wood Products Cash Budget For the Month Ended September 30, 2018 Month July August September $150,000 306,064 534,096 375,620 102,000 30,000 263,112 394,668 337,150 102,000 30,000 12 13 14 Schedule of Expected Cash Collections July August September 15 16 17 Accounts receivable, 6/30/2018 18 July sales ($1,475,800) 19 August sales ($1,783,500) 20 September sales ($1,396,300) 21 Total cash collections Cash balance, beginning Add: Receipts: Collections from customers Total cash available (a) Less: Disbursements: Direct materials Selling and admin. Equipment purchase Dividends Income tax Total disbursements (b) Minimum cash balance Total cash needed [c] Cash surplus (deficit) (a) - [c] Finance: Borrowing Repayment Interest Total effect of financing (d) Cash balance, ending [(a)-(b) + (d)] 23 24 Schedule of Expected Cash Payments August September July 25 26 27 Accounts payable, 6/30/2018 28 July purchases 29 August purchases 30 September purchases 31 Total cash disbursement 32 Sheet1 Sheet2 Sheet3 D E F G August $ 1,783,500 September $ 1,396,300 X fx B C Wood Products Sales, purchase, and other budgets June July 4 Total sales $ 1,050,000 $ 1,475,800 5 Purchases of material 6 For cash 306,192 7 For credit 360,000 459,288 8 Selling and admin. expenses 348,600 9 Income taxes 102,000 10 Dividends 30,000 11 Equipment purchase 200,000 1 Wood Products Cash Budget For the Month Ended September 30, 2018 Month July August September $150,000 306,064 534,096 375,620 102,000 30,000 263,112 394,668 337,150 102,000 30,000 12 13 14 Schedule of Expected Cash Collections July August September 15 16 17 Accounts receivable, 6/30/2018 18 July sales ($1,475,800) 19 August sales ($1,783,500) 20 September sales ($1,396,300) 21 Total cash collections Cash balance, beginning Add: Receipts: Collections from customers Total cash available (a) Less: Disbursements: Direct materials Selling and admin. Equipment purchase Dividends Income tax Total disbursements (b) Minimum cash balance Total cash needed [c] Cash surplus (deficit) (a) - [c] Finance: Borrowing Repayment Interest Total effect of financing (d) Cash balance, ending [(a)-(b) + (d)] 23 24 Schedule of Expected Cash Payments August September July 25 26 27 Accounts payable, 6/30/2018 28 July purchases 29 August purchases 30 September purchases 31 Total cash disbursement 32 Sheet1 Sheet2 Sheet3