Cash Budget - Dash Shoes Inc.:

Cash Budget The controller ofDash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information May March April Sales $123,000 $145,000 $209,000 52,000 2,000 75,000 Manufacturing costs Selling and administrative 36,000 39,000 46,000 expenses Capital expenditures 50,000 The company expects to sell about 15% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent S7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in July, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. Cument assets as of March 1 include cash of $47,000, marketable securities of S66,000, and accounts receivable of $147,200 (S108,000 from February sales and S39,200 from January sales). Sales on account for January and February were $98,000 and $108,000, respectively Current liabilities as of March 1 include a $62,000, 12 90-day note payable due May 20 and S7,000 of accounts payable incurred in February formanufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that S3,700 in dividends will be received in March. An estimated income tax payment of S17,000 will be made in April. Dash Shoes regular quarterly dividend of $7,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $37.000