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show how a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations:

a. The cash balance on December 1 is 40,000.

b. Actual sales for October and November and expected sales for December are as follows:

October

November

December

Cash sales

65,000

70,000

83,000

Sales on account

4,00,000

5,25,000

6,00,000

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 sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible

c. Purchases of inventory will total 2,80,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total 1,61,000, all of which will be paid in December.

d. Selling and administrative expenses are budgeted at 4,30,000 for Decemberr. Of this amount 50,000 is for depreciation.

e. A new web server for the Marketing Department costing 76,000 will be purchased for cash during December, and dividends totalling 9,000 will be paid during the month.

f. The company maintains a minimum cash balance of 20,000. An open line of credit is available from the company's bank to bolster the cash position as needed.

Required:

1. Prepare a schedule of expected cash collections for December.

2. Prepare a schedule of expected cash disbursements for merchandise purchases for December.

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