We are Preparing the operating budget for the fourth quarter of 2009:

Cash Disbursements for Purchases and Operating Expenses	October	November	December	4th Quarter
Last month's Inventory Purchases	21,750
This month's Inventory Purchasees	26,100
Administration	2,500
General	3,600
Commission	7,200
Equipment	1,500
	62,650	-	-	-
Overall Cash Budget	October	November	December	4th Quarter
Beginning balance	8,000
Cash collections	55,640
Cash inflows	63,640	-	-
Cash payments	62,650
Net cash	990	-	-
Borrowing	4,000
Repayment-principal	-
Repayment-interest	-
Ending balance	4,990	-	-

FILL THE BLANK WITH THE INFORMATION PROVIDES BELOW:

Current account data on September 30,2009 ( the end of the third quarter):

Account	Debit	Credit
Cash	8,000
Account Receivable	20,000
Inventory	36,000
Building and equipment, net of depreciation	120,000
Accounts payable		21,750
Common stock		150,000
Retained Earnings		12,250
Total	184,000	184,000

Monthly fourth quarter sales estimates, along with the current month's actual sales and forecast for January 2010:

Month	Sales
September (actual)	50,000
October	60,000
November	72,000
December	90,000
January 2010	48,000

1) The company prices its product to ensure 25% gross profit margin on sales. the company met that margin through the first three-quarters of 2009.

2) 60% of customers pay in cash ( Those customers receive a 1% discount on the invoice price)

+ Account for 1% cash discount as part of operating expenses (rather than as the more technically correct reduction of gross sales) when constructing the pro forma income statements in order to be consistent with the bullet point above.

3) 40% of customers pay on account

4) Credit sales terms are n/2EOM, credit terms requiring payment by the end of the month following purchase ( IF we make a credit sale in October, they will pay us by the end of November)

5) Company typically write off 1% of credit customer accounts as uncollectible.

6) No writes offs were currently pending as September 30 and none were expected to originate from third quarter activity.

7) The company has a clean slate for the fourth quarter budget.

The Company Will collect all of the 20,000 accounts receivable balance at Sep 30 by the end of October

8) Bad debt expense and the allowance for doubtful accounts have 0 balance at Sep 30, The company need to reestablish them for fourth quarter bad debts. The company will write offs 2009 fourth quarter bad debts sometime during 2010.

Third quarter monthly expense data:

Monthly Expense Item	Amount
Administration	2,500
General	6% of sales
Commission	12% of sales
Depreciation	850

9) the company pays its operating expenses in the month it accrue them

10) The company managed inventory so that its ending balance sheet equaled 80% of the next month's COGs.

11) Account payable clerk pays one-half of each months inventory cost in the month of acquisition, and the remaining 50% in the following month

12) Cash purchase of 1,500 for Scanning devices in early October ( The firm will depreciate this equipment over thirty months on the straight line basis

13) Insist that Maintain an ending monthly cash balance of 4,000 to remain financially flexible

14) The company has an open line of credit with its banking partner to ensure that it can meet its cash balance goal (12% annual interest rate for all short-term borrowings.)

15) Financing must take place at the beginning of the month in thousand dollar multiples. Repayments of borrowing must also occur in thousand dollar increments, and the bank only accepts interest payments when the company repays principal.