Do not answer in image format. Answer completely. Knot on a Log, Inc. is a merchandiser of rustic furniture. All sales are made on account. Cash collectionsfrom customers are normally 75% in the first month following the month sale and 24% in the second monthfollowing the month of sale. The balance is deemed uncollectible. August sales were $95,000. Septembersales were $100,000. October sales are expected to be $122,000.Accounts payable consists solely of inventory purchases. All inventory purchases are made on account.Management takes full advantage of the 3% discount allowed on purchases paid by the tenth of the followingmonth. September purchases were $105,000. October purchases are expected to be $95,000.Additional expenses for the month of October are budgeted to be $25,000. Of this amount, $5,000 is for baddebt expense and depreciation expense. In addition, during the month of October, the company expects todeclare and pay $3,000 in dividends to its owners.The beginning October 1st cash balance is expected to be $36,000. Calculate the excepted cash balance onOctober 31st$5,800$26,650$3,950$11,950$8,950

Budgeting is a process of estimating income and expenses in advance for the upcoming period. Cash…

Answered: Knot on a Log, Inc. is a merchandiser…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 18E

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