The Management accountant at Long Pond Electronics Company, Robert Miles, is in the process of preparing the cash budget for the business for the quarter ending December31,2016.Extracts from the sales and purchases budgets are follows:

Month 2016	Cash sales	Sales on Account	Purchases on Account
August	$121000	$480000	$390000
September	$95500	$600000	$360000
October	$110580	$720000	$480000
November	$125900	$650000	$400000
December	$156750	$800000	$500000

(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 terms5/30,n90:

60% in the month of sale

30% 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 3/30,n60:

80% in the month in which the inventory is purchased

20% in the following month

(III) During December, The management of long pond Electronics expects to sell an old motor vehicle that cost $500000 at a gain of $45000.Accumulated depreciation on this motor vehicle at that is expected to be $345000.The employee will be allowed to pay a deposit equal to 65% of the selling price in December and the balance settled in two equal amounts in January & February of 2017.

(IV)Furniture and Fixtures, which is estimated to cost $240750,will be purchased for Cash in December.

(V) a long-term bond purchased by Long Pond Electronics with a face value of $500000 will mature on October 20,2016.In Order to meet the Financial Obligations of the business, management has decided to liquidate the investment upon maturity. On that date quarterly interest computed at a rate of 6% per Annum is also expected to be collected.

(VI)Fixed operating expenses which accrue evenly throughout the year, are estimated to be $2016000 per annum (including depreciation on non-current assets of $42000 per month ) and are settled monthly.

(VII)other operating expenses are expected to be $171000 per quarter and are settled monthly.

(VIII)The management of Long Pond has negotiated with a tenant to rent office space to her beginning November 1.The rental is $540000 per annum .The first months rent along with one months safety deposit is expected to be collected on November1.Thereafter,momnthly rental income becomes due at the beginning of each month.

(IX)wages and salaries are expected to be $2880000 per annum and will be paid monthly.

(X) At the recently concluded negotiations between management and the Union representing the workers it was agreed that Long Pond Electronics should make retroactive payments in the amounts of $1500000 to employees. The payment is being settled in four equal tranches. The third payment becomes due and payable in October 2016.

(XI) The cash balance on September 30,2016 is expected to be an overdraft of $155000

Required:

1. Prepare a schedule of Budgeted cash collections for sales for each of the months October to December,2016.

2. Prepare a schedule of expected cash disbursements for purchases for the quarter to December 31,2016.

3. Prepare a cash budget, with a total column, for the quarter ending December31,2016,showing the receipts and payments for each month

4. Companies in the industry in which Long Pond Electronics operates are required to maintain a minimum cash balance of $145000 each month. Based on the budget prepared, will the business be meeting this requirement? Suggest three (3)possible steps(other than borrowing), that may be taken by the management of the company to improve the organizations cash flow.