Cash Budget

The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budgetinformation:

March		April		May
Sales	$123,000		$155,000		$209,000
Manufacturing costs	52,000		67,000		75,000
Selling and administrative expenses	36,000		42,000		46,000
Capital expenditures	_		_		50,000

The company expects to sell about 10% 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 $10,000 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, 75% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of March 1 include cash of $47,000, marketable securities of $66,000, and accounts receivable of $147,200 ($108,000 from February sales and $39,200 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 $10,000 of accounts payable incurred in February for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $3,700 in dividends will be received in March. An estimated income tax payment of $19,000 will be made in April. Dash Shoes' regular quarterly dividend of $10,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $37,000.

1. Fill in the 3 empty boxes.

Dash Shoes Inc Cash Budget For the Three Months Ending May 31, 2014 March April May Estimated cash receipts from: Cash sales 12300 15500 20900 Collection of accounts receivable 104000 109620 127980 Dividends 3700 Total cash receipts 120000 125120 148880 Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: 41500 53250 63000 36000 42000 46000 50000 Note payable (including interest) Income tax 19000 Dividends 10000 Total cash payments 77500 114250 Cash increase or (decrease) 42500 10870 Cash balance at beginning of month 47000 89500 10037 Cash balance at end of month 89500 100370