PROBLEM 8–16 Schedules of Expected Cash Collections and Disbursements[LO2, LO4, LO8]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 $9,000.b. Actual sales for July and August and expected sales for September are as follows:JulyAugustSeptemberCash sales . . . . . . . . . . .$ 6,500$ 5,250$ 7,400Sales on account . . . . . . 20,000 30,000 40,000Total sales . . . . . . . . . . . .$26,500$35,250$47,400.transtutors.com/qimg/e66b44d1-d0e0-4953-83da-83a8e5b73efc.png”>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.c. 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.d. Selling and administrative expenses are budgeted at $13,000 for September. Of this amount,$4,000 is for depreciation..transtutors.com/qimg/7d7fac58-59d4-4226-8071-cb18c80fc75e.png”>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.3. 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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