AE had sales of $ 50,000 in March and $ 60,000 in April. Predicted sales in May, June, and July are $ 70,000, $ 80,000, and $ 100,000, respectively. On May 1, the business has a cash balance of $ 5,000 and wants to maintain a minimum cash balance of $ 5,000.

With the following data, prepare and interpret a cash budget for the months of May, June and July.

The company makes 20% of its sales in cash, charges 60% the following month and collects the remaining 20% in the second month after the sale. The company receives another income of $ 2,000 per month. The amounts of the company's actual or expected purchases, all in cash, are $ 50,000, $ 70,000, and $ 80,000 in the months of May through July, respectively. The rent is $ 3,000 per month. Salaries correspond to 10% of the previous month's sales. Cash dividends of $ 3,000 will be paid in June. A principal and interest payment of $ 4,000 will be made in June. A cash purchase of equipment is scheduled to cost $ 6,000 in July. Taxes of $ 6,000 to be paid in June