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 companys operations:

1. The cash balance on December 1 is $41,000.
2. Actual sales for October and November and expected sales for December are shown below. 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.

	October	November	December
Cash sales	$	68,400		$	87,400		$	95,800
Sales on account		415,000			614,000			692,000

1. Purchases of inventory will total $376,000 for December. Thirty percent of a months inventory purchases are paid during the month of purchase. The accounts payable remaining from Novembers inventory purchases total $174,500, all of which will be paid in December.
2. Selling and administrative expenses are budgeted at $452,000 for December. Of this amount, $63,500 is for depreciation.
3. A new web server for the Marketing Department costing $86,500 will be purchased for cash during December, and dividends totalling $10,500 will be paid during the month.
4. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the companys 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 during December for merchandise purchases.

3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.