The management accountant at Exquisite Creations Company, William Marston is in the process of preparing the cash budget for the business for the fourth quarter of 2017. The company usually has to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows Sales On Account $70,000 $640,000 $420,000 $55,000 $550,000 $550,000 $50,000 $600,000 $500,000 $45,000 $800,000 $600,000 $60,000 $600,000 $400,000 Purchases On Account Cash Sales Month August September October November December i) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 5/30, n90: 50% in the month of sale 40% in the first month following the sale 10% in the second month following the sale ii) Accounts payable are settled as follows, in accordance with the credit terms 10/30, n60: 70% in the month in which the inventory is purchased 30% in the following month i Fixed operating expenses which accrue evenly throughout the year, are estimated to be $1,560,000 per annum, (including depreciation on non-current assets of $40,000 per month) and is settled monthly iv) Wages and salaries are expected to be $2,160,000 per annum and will be paid monthly v) Other operating expenses are expected to be $96,000 per quarter and will be settled vi) Taxation of $85,000 has to be settled in December vi In the month of November, an old motor vehicle, with net book value of $70,000, will be monthly sold for cash to an employee at a gain of $40,000. The employee will be allowed to pay a deposit equal to 65% of the selling price in November and the balance settled in two equal amounts in December 2017 & January of 2018. vii Computer equipment, which is estimated to cost $125,500, will be acquired for cash in November ix) The management of Exquisite Creations has negotiated with a tenant to rent office space to her beginning November 1. The rental is $600,000 per annum. The first month's rent along with one month's safety deposit is expected to be collected on November 1. Thereafter, monthly rental income becomes due at the beginning of each month. The management accountant at Exquisite Creations Company, William Marston is in the process of preparing the cash budget for the business for the fourth quarter of 2017. The company usually has to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows Sales On Account $70,000 $640,000 $420,000 $55,000 $550,000 $550,000 $50,000 $600,000 $500,000 $45,000 $800,000 $600,000 $60,000 $600,000 $400,000 Purchases On Account Cash Sales Month August September October November December i) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 5/30, n90: 50% in the month of sale 40% in the first month following the sale 10% in the second month following the sale ii) Accounts payable are settled as follows, in accordance with the credit terms 10/30, n60: 70% in the month in which the inventory is purchased 30% in the following month i Fixed operating expenses which accrue evenly throughout the year, are estimated to be $1,560,000 per annum, (including depreciation on non-current assets of $40,000 per month) and is settled monthly iv) Wages and salaries are expected to be $2,160,000 per annum and will be paid monthly v) Other operating expenses are expected to be $96,000 per quarter and will be settled vi) Taxation of $85,000 has to be settled in December vi In the month of November, an old motor vehicle, with net book value of $70,000, will be monthly sold for cash to an employee at a gain of $40,000. The employee will be allowed to pay a deposit equal to 65% of the selling price in November and the balance settled in two equal amounts in December 2017 & January of 2018. vii Computer equipment, which is estimated to cost $125,500, will be acquired for cash in November ix) The management of Exquisite Creations has negotiated with a tenant to rent office space to her beginning November 1. The rental is $600,000 per annum. The first month's rent along with one month's safety deposit is expected to be collected on November 1. Thereafter, monthly rental income becomes due at the beginning of each month