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PROBLEM 8-16 Schedules of Expected Cash Collections and Disbursements [LO2, L04, L08] Calgon Products, a distributor of organic beverages, needs a cash budget for September. The following information is available: a. The cash balance at the beginning of September is $9,000. b. Actual sales for July and August and expected sales for September are as follows: July Cash sales ........... Sales on account...... Total sales. ........... $ 6,500 20,000 $26,500 August $ 5,250 30,000 $35,250 September $ 7,400 40,000 $47,400 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. Twenty percent of a month's inven- tory purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $16,000, all of which will be paid in September. Selling and administrative expenses are budgeted at $13,000 for September. Of this amount, $4,000 is for depreciation. d. e. Equipment costing $18,000 will be purchased for cash during September, and dividends total- ing $3,000 will be paid during the month. f. The company maintains a minimum cash balance of $5,000. An open line of credit is available from the company's bank to bolster the cash balance as needed. Required: 1. Prepare a schedule of expected cash collections for September 2. Prepare a schedule of expected cash disbursements for inventory purchases for September. 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

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