ACCT 110 Cruises, Inc. has budgeted sales revenues as follows

Cruises, Inc. has budgeted sales revenues as follows:June$135,00090,000$225,000Credit salesCash salesTotal salesJuly$125,000255,000$380,000August$ 90,000195,000$285,000Past experience indicates that 60% of the credit sales will be collected in the month of sale andthe remaining 40% will be collected in the following month. Purchases of inventory are all oncredit and 50% is paid in the month of purchase and 50% in the month following purchase.Budgeted inventory purchases are:JuneJulyAugust$300,000240,000105,000Other cash disbursements budgeted: (a) selling and administrative expenses of $48,000 eachmonth, (b) dividends of $103,000 will be paid in July, and (c) purchase of equipment in Augustfor $30,000 cash.The company wishes to maintain a minimum cash balance of $50,000 at the end of each month.The company borrows money from the bank at 6% interest if necessary to maintain theminimum cash balance. Borrowed money is repaid in months when there is an excess cashbalance. The beginning cash balance on July 1 was $50,000. Assume that borrowed money inthis case is for one month.InstructionsPrepare a cash budget for the months of July and August. Prepare separate schedules forexpected collections from customers and expected payments for purchases of inventory.Please follow the format in the next page for answering this questionCRUISES, INC.Cash BudgetFor the Two Months of July and AugustJulyBeginning cash balanceAdd: ReceiptsCollections from customersCash salesTotal receiptsTotal available cashLess: DisbursementsPurchasesSelling and administrative expensesDividendsEquipment purchaseTotal disbursementsExcess (deficiency) of available cash over disbursementsFinancingBorrowingsRepaymentsEnding cash balanceAugust