Carol Moore, owner of Carols Fashion Designs Inc. is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2012 and 2013:

May 2012 $180,000

June 180,000

July 360,000

August 540,000

September 720,000

October 360,000

November 360,000

December 90,000

January 2013 180,000

Collection estimates obtained through the credit and collection department are as follows: collections within the month of sale, 10 percent; collections the month following the sale, 75 percent; collections the second month following the sale, 15 percent. Payments for labor and raw materials are typically made during the month following the one in which these costs are incurred. Total labor and raw materials costs are estimated for each month as follows:

May 2012 $ 90,000

June 90,000

July 126,000

August 882,000

September 306,000

October 234,000

November 162,000

December 90,000

General and administrative salaries will amount to approximately $27,000 a month; lease payments under long-term lease contracts will be $9,000 a month; depreciation charges will be $36,000 a month; miscellaneous expenses will be $2,700 a month; income tax payments of $63,000 will be due in both September and December; and a progress payment of $180,000 on a new design studio must be paid in October. Cash on hand on July 1 will amount to $132,000, and a minimum cash balance of $90,000 will be maintained throughout the cash budget period.

1. Prepare a monthly cash budget for the last six months of 2012.