You are responsible for preparing a cash budget for Country Quilts and have collected the following details:

The cash balance on September $1$ is $$56,600$

Actual sales for July and August and budgeted sales for September 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 $20\%$ collected in the second month following sale. The company's bad debts are negligible.

July August September

Cash sales $ $71,200$ $ $73,400$ $ $86,200$

Sales on account $ $440,000$ $ $576,000$ $ $639,000$

Purchases of inventory will total $$315,000$ for September. Forty percent of a month$$s inventory purchases are paid during the month of purchase. The accounts payable remaining from August$$s inventory purchases total $$181,500,$ all of which will be paid in September.

Selling and administrative expenses are budgeted at $$522,000$ for September. Of this amount, $$74,100$is for depreciation and $$570$is for property taxes.

Annual property taxes of $$103,500$ will be paid during September.

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. All borrowing occurs at the beginning of a month.

Required:

Prepare a schedule of expected cash collections for September.

Prepare a schedule of expected cash disbursements during September for merchandise purchases.

Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the first day of the following month.

Assume that in October, Country Quilts has exactly the same collections from customers and cash disbursements as budgeted for September. Complete the financing section of the October cash budget. The interest rate on the line of credit is $0\mathrm{.}5\%$ per month.