Cash Budget

The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:

1. Cash balance on June 1 is $1,286.
2. Actual sales for April and May are as follows:

April

May

Cash sales

$10,000

$18,000

Credit sales

28,900

35,000

Total sales

$38,900

$53,000

1. Credit sales are collected over a 3-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible.
2. Inventory purchases average 72% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month.
3. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.
4. Rent is $4,400 per month.
5. Taxes to be paid in June are $6,780.

The owner also tells you that he expects cash sales of $18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesnt have access to short-term loans.

Required:

1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar. Be sure to enter percentages as whole numbers.