Cash Budget

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

The company expects to sell about $10\%$ of its merchandise for cash. Of sales on account, $65\%$ 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 $$6,000$ of the estimated monthly manufacturing costs. The annual

insurance premium is paid in September, 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 May $1$ include cash of $$33,000,$ marketable securities of $$48,000,$ and accounts receivable of $$101,500($ $$77,000$ from April sales and $$24,500$ from March

sales$).$ Sales on account for March and April were $$70,000$ and $$77,000,$ respectively. Current liabilities as of May $1$ include $$12,000$ of accounts payable incurred in April for

manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $$13,000$ will be made in June.

Sonoma's regular quarterly dividend of $$6,000$ is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $$26,000.$

Required:

Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should

be indicated with a minus sign.

Sonoma Housewares Inc.

Cash Budget

For the Three Months Ending July $31*$

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PLEASE MAKE SURE TO ANSWER ALL THE QUESTIONS ACCORDING TO INSTRUCTIONS AND PICTURES AND FILL IN THE BLANKS TO GET A POSITIVE FEEDBACK BACK PLEASE!

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