2. The following information has been assembled to assist in preparing a cash budget for the quarter: i. Budgeted monthly income statements for July-October are as follows: September 6,00,000 3,50,000 2,50,000 July 7,00,000 4,20,000 2,80,000 August 10,00,000 6,30,000 370,000 October 5,00,000 2,80,000 2,20,000 Sales Cost of goods sold Gross Margin Less Operating Expenses Selling expense Administrative expense Total expenses 62,000 41,000 1,03,000 147,000 79,000 45,000 1,24,000 120,000 52,000 1,72,000 198,000 51,000 38,000 89,000 131,000 Net Income * includes 28,000 depreciation each month. Sales are 30% for cash and 70% on credit. 156,000 ii. iii. Credit sales are collected over a three month period with 25% collected in the month of sale, 60% collected in the month following sale and 15% in the second month following sale. May sales totaled tk. 210,000 and June sales totaled tk. 400,000. Inventory purchases are paid for within 15 days. Therefore, 70% of a month's inventory purchases are paid for in the month of purchase. The remaining 30% is paid in the following month. Accounts payable for inventory purchases at June 30 total 1,35,000. The company maintains its ending inventory levels at 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is 84,000. vi. iv. Land costing tk. 25,000 will be purchased in August. vii. Dividends of tk. 50,000 will be declared and paid in July. viii. The cash balance on June 30 is tk 60,000; the company must maintain a cash balance of at least 25,000 at the end of the month. ix. The company can borrow from its bank as needed to cash account. Borrowings and repayments must be in multiples of 1,000. All borrowings take place at the beginning of a month and all repayments are made at the end of the month. The annual interest rate is 12%. Compute the interest on whole months. (1/12, 2/12, and so on.) Required: Prepare a cash Budget for the third quarter, by the month as well as for the quarter in total.