Whitlock, Inc., buys hardware parts from various manufacturers and sells them to retail stores. Management is presently trying to prepare a cash budget for August and has the following information available:

a. The cash balance on August 1 is $\$ 25,000$.

b. Actual sales for June and July and projected sales for August are as follows:

All accounts payable are paid in the month following the purchase

d. Total administrative and selling expenses (including $\$ 14,000$ depreciation) for August are expected to be $\$ 105,000$.

e. Whitlock expects to pay a $\$ 26,000$ dividend to stockholders and to purchase. for cash, a $\$ 25,000$ piece of land during August.

f. Cash on hand should never drop below $\$ 25,000$.
1. Prepare Whitlock's August cash budget, assuming that the company borrows any amounts needed to meet its minimum desired balance.
2. Interpretive Question: What types of expenses other than depreciation would be excluded from a cash budget?

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Cash sales Credit sales June July August $ 30,000 $ 45,000 $ 50,000 100,000 120,000 130,000 Credit sales are collected 65 percent during the month of sale. 26 percent dunng the month following the sale, and 11 percent during the second month following the sale. c. Whitlock's actual purchases for June and July and its projected purchases for August are as follows: Cash purchases. Credit purchases June July August $10,000 40,000 $20,000 50,000 $25,000 60,000