Chapter 21 Cash Budget Problem Dexter Morgan sells knives. His private business must maintain $50,000 cash at year- end, so he has a revolving loan agreement with Miami Metro Bank to borrow cash when the preliminary cash balance at the end of the month falls below $50,000, and to repay the loan when the balance exceeds $50,000 to the extent of either (a) the loan balance, or (b) the amount of excess cash, whichever is smaller. Cash interest is due to the bank at 1% of the beginning of the month loan balance, if any. The following information relates to Dexter's business in the month of May: Sales are 30% cash and 70% credit. Credit sales are collected the month following the sale. April sales were $80,000 and May sales are budgeted at $125,000. Knife inventory is purchased on credit, and credit purchases are paid 85% in the month of purchase and 15% the month following the purchase. April purchases were $50,000 and budgeted May purchases are $85,000. Cash at April 30 was $50,000. Loan Payable at April 30 was $135,000. Salaries expense of $18,000 will be paid in May. Sales commissions of 6% of sales will be paid in May. Other cash expenses in the amount of $1,800 will be paid in May. Prepare the cash budget for Dexter Morgan as of May 31