Water Sport Inc. manufactures a small personal water tube used for children learning to swim. Management is now preparing detailed budgets forthe third quarter, Julythrough September, and has assembled the following information to assist: a. The Marketing Department has estimated sales as follows forthe remainder ofthe year {number of water tubes): July 15506 October 4,606 August 6, tea November 3,6816 Septerrber' 5, 180 December 3,186 The selling price ofthe water tubes is $50. b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: 5096 in the month of sale 4596 in the month following sale 596 uncollectible The beginning accounts receivable balance {excluding uncollectible amounts} on July I will be $165,500. c. The companyr maintains nished goods inventories equal to 2096 of the following month's sales. The inventory of nished goods on July I will be 1,520 units. 0'. Each water tube requires 3 kilograms of synthetic polyisoprene rubber compound. To prevent shortages, the company would like the inventory of synthetic rubber compound on hand at the end ofeach month to be equal to 20% of the following month's production needs. The inventory of synthetic rubber compound on hand on July1 will be 4,380 kilograms. e. The synthetic rubber compound costs $4.00 per kilogram. Water Sport pays for 10% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for synthetic rubber compound purchases will be $14300 on July 1. Required: 1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both units of watertubes and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter. Budgeted sales (u nits) Selling prioe per unit Total budgeted sales Accounls receivable, beginning balance July sales: August sales: Septem ber sales: Total cash mlledions 2. Prepare a production budget for each of the months July through October. Budgeted sales (u nits) Required production {mils} 3. Prepare a direct materials purchases budget for synthetic rubber compound, by month and in total, for the third quarter. Also prepare a schedule of expected cash disbursements for synthetic rubber compound, by month and in total, for the third quarter. Required production (unilsl Material D236 needed per unit (logs) Produdion needs (Rigs) Raw materials to be purchased Cost of raw materials to be purchased at $4.00 per kg Accounts payable, beginning balance July purchases: August purchases: September purchases: Total cas h disbursemenls