• You have been hired as the controller at Akfit, a distributor of exercise equipment. The manager has provided you with the following financial information to start preparing the budget for the upcoming month:
• Cash balance at December 1 is $40,000.
• Actual sales for October and November and budgeted sales for December are shown below. Sales on account are collected over a three-month period: 20% in the month of sale, 60% in the month following the sale, and 18% collected in the second month following the sale. The remaining 2% is uncollectible.

	October	November	December
Cash Sales	$65,000	$70,000	$83,000
Sales on account	400,000	525,000	600,000

• Purchase of inventory will total $280,000 in December. Thirty percent of a month’s inventory purchases are paid during the month of purchase. The accounts payable balance at the end of November totals $161,000 which will be paid in December.
• Selling and administrative expenses are budgeted at $430,000 for December (which includes $50,000 in depreciation).
• A new web server for the marketing department costing $76,000 will be purchased for cash during the month of December, and dividends totalling $9,000 will be paid during the month.
• The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company’s bank as needed.
• Required:
• Prepare a schedule of expected cash collections for the month of December.
• Prepare a schedule of expected cash disbursements for the month of December.
• Prepare a cash budget for the month of December.
• Budgeting helps in the planning and controlling of both fixed and variable costs. Explain the difference, if any, between planning and controlling of fixed costs and variable costs.