Davide's Arrangements purchases, wholesales, and retails fresh flowers. Company estimates reveal the following for the first three months of the company's 2011 fiscal year:

Davide's pays 60 percent of any month's purchases in the month of purchase, receiving a 2 percent discount on those payments. The remaining amount is paid in the following month, with no discount given. Other monthly payments for expenses are $48,000 plus 12 percent of sales revenue. Depreciation is $8,000 per month. Davide's maintains a minimum cash balance of $28,000. Borrowings and repayments must be made in $1,000 amounts.
All retail sales are for cash and all wholesale transactions are on credit. Experience indicates the following expected collection pattern for credit sales: 25 percent in the month of sale, 60 percent in the month following the sale, and 15 percent in the second month following the sale. The company has no debt other than what is currently owed for purchases on account.
a. Calculate the July 31 balances for Accounts Receivable and Accounts Payable.
b. Calculate the expected total cash collections in August.
c. Calculate the expected total cash disbursements in August.
d. Prepare a cash budget for August, assuming that the beginning balance of cash was $28,470.
e. Prepare a budgeted income statement for August. Assume an average gross profit rate of 45 percent and ignore income taxes.
f. Explain how and why inventory management must be different for perishable commodities than for nonperishablecommodities.

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June July August PURCHASES $132,000 116,000 160,000 SALES 204,000 184,000 232,000