2) Lines Company is a retailer that sells a single product. The company's inventories,production, and sales in units for the next three months have been budgeted as follows:Beginning inventoryMerchandise purchasesSalesEnding inventorySeptember44,5003,00037,50010,000October10,00060,00060,00010,000November December10,00010,00070,00035,00070,00040,00010,0005,000Units are sold for $12 each. Thirty percent of all sales are paid for in the month of sale andthe balance is paid for in the followin month.Merchandise is purchased for $7 per unit. Forty percent of purchases are paid for in themonth of the purchase and the remainder is paid for in the month following purchase.Marketing and administrative expenses are expected to total $140,000 each month. Forty-five percent of these expenses will be paid in the month in which they are incurred and thebalance will be paid in the following month.Cash at September 30 totaled $90,000. A payment of $250,000 for the purchase ofequipment is scheduled for November, and a dividend of $150,000 is to be paid inDecember. Ignore depreciation for purposes of preparing the schedules.a. Prepare a cash collections budget for October, November, and December.b. Prepare a cash disbursements budget including merchandise purchases and marketingand administrative expenses for October, November, and Decemberc.Prepare a cash budget for October, November, and December. There is no minimumrequired ending cash balance.

Name: 2) Lines Company is a retailer that sells a single product. The compa
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: 2) Lines Company is a retailer that sells a single product. The company's inventories,production, and sales in units for the next three months have been budgeted as follows:Beginning inventoryMerchandise purchasesSalesEnding inventorySeptember44,500

A budget is an estimate of amount which is prepared by the management for various planning and scheduling purposes. The budget provides the management a close estimate of what could possibly be the final result of operations in many operations of the company. Cash collection refers to the amount of cash that will be collected from the customers for the period.Requirement 1Requirement 2