April ($) May ($) June ($)

Sales 120,000 140,000 190,000

Merchandise purchases 75,000 95,000 115,000

Selling and administrative expenses 60,000 60,000 60,000

Sales on credit: 40% are collected in the month of sale

58% in the month following the sale

remaining 2% are uncollectible

Merchandise purchases are paid in full the month following the month of purchase. The selling and administrative expenses above include $7,000 of depreciation on display fixtures and warehouse equipment. Expenses are paid as incurred.

Cash balance to maintain minimum-$18,000

All borrowings are made at month end. The interest rate =2% per month

Can you calculate the cash budget of May,

expected cash on hand at beginning of may - $34,000