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 $$41,200.$

b$.$ Actual sales for October and November and expected sales for December are as follows:

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 $$366,000$ 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 $$183,000,$ all of which will be paid in

December.

d$.$ Selling and administrative expenses are budgeted at $$472,000$ for December. Of this amount, $$60,000$ is for depreciation.

e$.$ A new web server for the Marketing Department costing $$96,000$ will be purchased for cash during December, and dividends

totaling $$11,500$ 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

increase its cash balance as needed.

Required:

Calculate the expected cash collections for December.

Calculate the expected cash disbursements for merchandise purchases for December.

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.