You have been asked to prepare 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:
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 280,000 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 161,000 , all of which will be paid in December. d. Selling and administrative expenses are budgeted at 430,000 for December. 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 totaling 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.
(a) Prepare a schedule of expected cash collections for December.