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 budget information:

	March		April		May
Sales	$99,000		$128,000		$164,000
Manufacturing costs	42,000		55,000		59,000
Selling and administrative expenses	29,000		35,000		36,000
Capital expenditures	_		_		39,000

The company expects to sell about 12% 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 (the second month following the sale). Depreciation, insurance, and property tax expense represent $6,000 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.

Current assets as of March 1 include cash of $38,000, marketable securities of $53,000, and accounts receivable of $118,600 ($87,000 from February sales and $31,600 from January sales). Sales on account for January and February were $79,000 and $87,000, respectively. Current liabilities as of March 1 include a $50,000, 12%, 90-day note payable due May 20 and $6,000 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 $3,000 in dividends will be received in March. An estimated income tax payment of $15,000 will be made in April. Dash Shoes' regular quarterly dividend of $6,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $30,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for March, April, and May. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

Dash Shoes Inc.

Cash Budget

For the Three Months Ending May 31, 2016

March April May Estimated cash receipts from: Cash sales Collection of accounts receivable Dividends Total cash receipts Estimated cash payments for: Manufacturing costs Selling and administrative expenses QUOQD Capital expenditures Other purposes: Note payable (including interest) 1000) I H0D 007 Income tax Dividends Total cash payments Cash increase or (decrease) A Cash balance at beginning of month Cash balance at end of month Minimum cash balance Excess or (deficiency)