Sales on account are collected over a three-month period as follows: 10% collect

Question

Sales on account are collected over a three-month period as follows: 10% collected in the month of sale, 70% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible.

Purchases of inventory will total $25,000 for September. Thirty percent of a month's inventory purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $19,000, all of which will be paid in September.

Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Calgon Products, a distributor of organic beverages, needs a cash budget for September. The following information is available:

Explanation / Answer

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Schedule of Expected Cash Collections September cash sales 9200 September collections on account:
July 3420 August 24500 September 3800

Total cash collections 40920

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