You have been asked to prepare a December cash budget for Ashton Company, a distributor al exercise equipment. The following information is available about the company's operations: 2. The cash balance on December 11 551,800. 3. Actual sales for October and November and expected sales for December are as follows: October November December 900.000 52.000 3 09.200 on sunt 5470.000.5503.000 $630,000 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 site, and 18% collected in the second month following sale. The remaining 29 is uncollectible. Purchases of inventory will total 5338.000 for December Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts mayable remaining from November's inventory purchases total 163,000, all of which will be paid in December 1. Selling and administrative expenses are budgeted at 5434,000 for December of this amount. $80,400 for depreciation. A new web server for the Marketing Department costing 59.000 will be purchased for canh curtng December and dividends totallene $ 16.000 will be paid dweling The company matains a mitme cast balance of $20,000. An open line of credit is available from the company's bank to increase its cash bilance anded 1 + . 6 & 7 C 9 8 o E R h Y U O P 7 8 5 D F G H J K L 4 5 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December Total cash collections Cash disbursements for merchandise purchases 1362 wurdt Type here to search o @ $ % & 7 8 6 4 3 un w E G R T YU pboard Font Paragraph Styles faring 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. Ashton Company Cash Budget For the Month of December Beginning cash balance Add collections from customers Total cash available 0 Less cash disbursements Payments to suppliers for inventory Selling and administrative expenses New web server Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements 0 Financing Borrowings Repayments Interest Tot mancing 0 Ending cash balance $0 o Type to search