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:

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.

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 mirus sign.

Sonoma Housewares Inc. Cash Budget

Cash Budget

For the Three Months Ending July $31$

$\backslash$table$[[$For the Three Months Ending July $31],[$May June July$]]$

Estimated cash receipts from:

Cash sales

$$

$|$:

Collection of accounts receivable

Total cash receipts

Estimated cash payments for:

Manufacturing costs

Selling and administrative expenses

Capital expenditures

other purposes:

Income tax

Dividends

Total cash payments.

Cash increase or $($decrease$)$

Cash balance at beginning of month

Cash balance at end of month

Minimum cash balance

Excess $($deficiency$)$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:

May June July

Sales $$112,000$ $$139,000$ $$177,000$

Manufacturing costs $47,00060,00064,000$

Selling and administrative expenses $32,00038,00039,000$

Capital expenditures $\_\_94,000$

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 $$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 $$43,000,$ marketable securities of $$60,000,$ and accounts receivable of $$134,000($$$98,000$ from April sales and $$36,000$ from March sales$).$ Sales on account for March and April were $$90,000$ and $$98,000,$ respectively. Current liabilities as of May $1$ include $$11,000$ 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 $$17,000$ will be made in June. Sonoma$$s regular quarterly dividend of $$6,000$ is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $$34,000.$

Required:

Question Content Area

$1.$ 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.