The garden supply company has the following business transaction estimates relating to the final quarter of 2020. Assume cash transactions where appropriate unless explained otherwise.

October November December

$ $ $

Total Sales See note 1. 110,000 130,000 180,000

Receipts from Accounts Receivable 70,000 To calculate See note 2.

Wages 30,000 35,000 40,000

Office Equipment 0 7,000 0

Lease Prepayment for 2021 0 0 4,000

Administrative Expenses 3,000 3,000 3,000

Accrued Expenses 0 0 8,000

Depreciation on Office Equipment 7,000 8,000 8,000

Maturing of Term Deposit 8,000 0 0

Credit Purchases 70,000 80,000 90,000

Payments of Accounts Payable To calculate - See note 3.

Drawings 3,000 4,000 5,000

Notes

1. 30% of total sales are cash sales. 70% of total sales are on credit.

2. Actual receipts from Accounts Receivable are 79% of the previous months credit sales and the balance owing is received in the following month. Actual credit sales were $70,000 in both August and September 2020.

3. Credit purchases on Accounts Payable are paid 65% in the month of purchase with the remainder paid in the month following. Credit purchases in September 2020 were $60,000.

4. Garden Supplys cash balance at 1 October 2020 was $555.

Prepare a month by month cash budget for the quarter ending 31 December 2020 and comment briefly on the monthly cash positions.Explain in full detail how to calculate account Receivable and Payments of Accounts Payable.