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You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations: a. The cash balance on December 1 is $45,400. b. Actual sales for October and November and expected sales for December are shown below. Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. Cash sales Sales on account october $ 67,800 465,000 November $ 70,400 562,000 December $ 93,000 614,888 c. Purchases of inventory will total $356,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $164,000, all of which will be paid in December d. Selling and administrative expenses are budgeted at $431,000 for December. Of this amount, $54,200 is for depreciation. e. A new web server for the Marketing Department costing $120,500 will be purchased for cash during December, and dividends totalling $13,500 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to bolster the cash position as needed. Required: 1. Prepare a schedule of expected cash collections for December. Schedule of Expected Cash Collections December cash sales Collections on account: October sales 83.700 November sales 337,200 December sales 122,800 Total cash collections $ 543.700 2. Prepare a schedule of expected cash disbursements during December for merchandise purchases. Schedule of Expected Cash Disbursements Payments to suppliers: November purchases $ 164,000 December purchases 106.800 Total cash payments $ 270,800 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month. $ 45,400 543,700 Ashton Company Cash Budget For the Month of December Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Payments to suppliers for inventory Selling and administrative expenses New web server Dividends paid 589.100 $ 270,800 376,800 120,500 13,500 781,600 (192,500) 212,500 Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Interest Total financing Ending cash balance 212.500 20,000 $