ABC Industries prepares monthly cash budgets. The following budget information is available for July and August 2018:

	July	August
Sales	$700,000	$800,000
Direct material purchases	220,000	240,000
Direct labor	200,000	230,000
Manufacturing overhead	120,000	150,000
Selling and administrative expenses	150,000	160,000

All sales are credit sales. The company expects to collect 60% from customers in the month of the sale and the remaining 40% in first month following the sale. The company purchases direct materials on account. The company pays for 70% of the purchases in the month of the purchases and the remaining 30% in the first month following the purchase. Direct labor, manufacturing overhead, and selling and administrative expenses are paid in cash in the month incurred.

Additional information:

June 2018 credit sales were $580,000

June 2018 purchases of direct materials were $180,000

The companys cash balance on July 1, 2018 is expected to be $100,000

The company wants to maintain a minimum cash balance of $80,000 and has a line of credit in the amount of 1,000,000, with an annual interest rate of 6%, available to borrow if the budgeted cash balance falls below that level. Any amounts borrowed on the line of credit at the end of a month require a cash interest payment in the subsequent month. If the ending cash balance in a month exceeds the minimum balance, the excess amount is used to repay any amounts borrowed on the line of credit.

Required

Prepare a schedule of cash collections from credit sales for July and August 2018.

Prepare a schedule of cash disbursements for direct material purchases for July and August 2018.

Prepare a cash budget for July and August 2018 in columnar format.