Cash Budget Cash BudgetFriendly Freddie's is an independently owned major appliance and electronics discount chain with seven stores located in a Midwestern metropolitan area. Rapid expansion has created the need for careful planning of cash requirements to ensurethat the chain is able to replenish stock adequately and meet payment schedules to creditors. Fred Ferguson, founder of the chain, has established a banking relationship that provides a $200,000 line of credit to Friendly Freddie's. The bankrequires that a minimum balance of $8,200 be kept in the chain's checking account at the end of each month. When the balance goes below $8,200, the bank automatically extends the line of credit in multiples of $1,000 so that the checkingaccount balance is at least $8,200 at month-end.Friendly Freddie's attempts to borrow as little as possible and repays the loans quickly in multiples of $1,000 plus 2 percent monthly interest on the entire loan balance. Interest payments and any principal payments are paid at the end of themonth following the loan. The chain currently has no outstanding loans.The following cash receipts and disbursements data apply to the fourth quarter of the current calendar year.Estimated beginning cash balance$ 8,800Estimated cash sales:October14,000November29,000December44,000Sales on account:July (actual)130,000August (actual)104,000September (actual)128,000October (estimated)135,000November (estimated)142,000December (estimated)188,000Projected cash collection of sales on account is estimated to be 70 percent in the month following the sale, 20 percent in the second month following the sale, and 6 percent in the third month following the sale. The 4 percent beyond the thirdmonth following the sale is determined to be uncollectible. In addition, the chain is scheduled to receive $13,000 cash on a note receivable in October.All inventory purchases are made on account as the chain has excellent credit with all vendors because of a strong payment history. The following information regarding inventory purchases is available. Inventory PurchasesSeptember (actual)$120,000October (estimated)112,000November (estimated)128,000December (estimated)95,000Cash disbursements for inventory are made in the month following purchase using an average cash discount of 3 percent for timely payment. Monthly cash disbursements for operating expenses during October, November, and December areestimated to be $38,000, $41,000, and $46,000, respectively.Required:Prepare Friendly Freddie's cash budget for the months of October, November, and December showing all receipts, disbursements, and credit line activity, where applicable. (CMA adapted). Enter all cash disbursements as positive values. If a cashbalance is negative, enter the amount as a negative value.Friendly Freddie'sCash BudgetOctober through DecemberOctoberNovember DecemberBeginning cash balanceReceipts:Total cash availableDisbursements:Total disbursementsCash balanceAdjusted cash balance

Statement showing cash collection each month July (in $) August (in $) September (in $)…

Friendly Freddie's is an independently owned major appliance and electronics discount chain with seven stores located in a Midwestern metropolitan area. Rapid expansion has created the need for careful planning of cash requirements to ensure that the chain is able to replenish stock adequately and meet payment schedules to creditors. Fred Ferguson, founder of the chain, has established a banking relationship that provides a $200,000 line of credit to Friendly Freddie's. The bank requires that a minimum balance of $8,200 be kept in the chain's checking account at the end of each month. When the balance goes below $8,200, the bank automatically extends the line of credit in multiples of $1,000 so that the checking account halance is at least $8. 200 at month-end.