(TCO D) The Oxford Company has budgeted sales revenues as follows. Oct.

(TCO D) The Oxford Company has budgeted sales revenues as follows.

Oct.

Nov.

Dec

Credit sales

120000

96000

72000

Cash sales

72000

204000

156000

Total sales

192000

300000

228000

Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following
month.

Purchases of inventory are all on credit with 60% paid in the month of purchase and 40% in the month following purchase. Budgeted inventory purchases are
$260000 in October $180000 in November and $84000 in December.

Other budgeted cash receipts include (a) the sale of plant assets for $49400 in November and (b) the sale of new common stock for $67400 in December.

Other budgeted cash disbursements include (a) operating expenses of $27000 each month (b) selling and administrative expenses of $50000 each month (c)
dividends of $76000 to be paid in November and (d) purchase of equipment for $24000 cash in December

The company has a cash balance of $40000 at the beginning of December and wishes to maintain a minimum cash balance of $40000 at the end of each month.
An open line of credit is available at the bank and carries an annual interest rate of 12%. Assume that all borrowing is done on the first day of the month
in which financing is needed and that all repayments are made on the last day of the month in which excess cash is available. Also assume that $14000 of
financing was obtained on November 1.

Requirements:

Use this information to prepare a schedule of expected cash payments for purchases of inventory for the months of November and December only