The MH Company sells only one product, herbal soap. Part of their trial balance on 1 October 2020 shows the following:

DR CR

cash 5000

accounts receivable 15,620

allowance for bad debts 2,100

merchandise inventory 12,240

accounts payable, merchandise 7,280

The company pays for its purchase within 10 days of purchase, so assume that one-third of the purchases of any month are due and paid in the following month. The cost of the merchandise purchased is £12 per case. At the end of each month, it is desired to have an inventory equal in units to 60% of the following month’s sales in units.

Sales terms include a 3% discount in payment is made by the end of the calendar month. Past experience indicates that 70% of sales will be collected during the month of the sale, 20% in the following calendar month, 5% in the next following calendar month, and the remaining 5% will be uncollectible. The company’s fiscal year begins 1 August. The table below shows estimated and actual sales for the Quarter.

Unit selling price 22

August actual sales. 8,800

September actual sales. 44,000

October estimated sales 37,400

November estimated sales 19,800

total sales expected in the fiscal year 528,000

Exclusive of bad debts, total budgeted selling and general administrative expenses for the fiscal year are estimated at £ 84,600, of which £ 27,000 is a fixed expense (which includes a £12,900 annual depreciation charge). The MH company incurs these fixed expenses uniformly throughout the year. The balance of the selling and general administrative expenses varies with sales. Expenses are paid as incurred.

Required

Prepare a cash budget with estimated cash receipts and disbursements for October 2020 for the MH Company.