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 companys operations:

a.	The cash balance on December 1 is $53,400.
b.	Actual sales for October and November and expected sales for December are as follows:

	October		November		December
Cash sales	$	77,000	$	81,200	$	87,800
Sales on account		435,000		538,000		644,000

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.

c.

Purchases of inventory will total $341,000 for December. Thirty percent of a months inventory purchases are paid during the month of purchase. The accounts payable remaining from Novembers inventory purchases total $165,000, all of which will be paid in December.

d.

Selling and administrative expenses are budgeted at $516,000 for December. Of this amount, $94,900 is for depreciation.

e.

A new web server for the Marketing Department costing $121,500 will be purchased for cash during December, and dividends totaling $13,000 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 companys bank to bolster the cash position as needed.

Required:

1.

.

Prepare a schedule of expected cash collections for December.

2.

Prepare a schedule of expected cash disbursements for merchandise purchases for December.

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.