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Cish Bunfoet: The controlier of Sonoma Housewares inc. instructs you to orepare a monthy cash budget for the noxt thiee months. You are presented with

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Cish Bunfoet: The controlier of Sonoma Housewares inc. instructs you to orepare a monthy cash budget for the noxt thiee months. You are presented with the following budget infirmation The company expects to sell about 10% of its merchandise for cash. Of saies on account, 70% are expectiad to be collected in the menth foliowing the sale and the remainder the following month (secand menth following sale). Depreciation, insurance, and property tax expense represent $10,000 of the estimated monthly manufacturiog costw. Thn annual inaurance premium is Dald in septembec, and the annual property taxes are poid in November. Of the remainder of the manufacturing costs, soss are expected to be pald in the manth in which they are incurred and the balance in the following monch. Current assets es of May 1 include cosh of $33,000, marketable securities of $48,000, and accounts receivable of $98,000 ( $77,000 from April sales and $21,600 from March sales), Sales of account for March and April were $70,000 and $77,000, fespectively. Current liabilties as of May 1 indude $13,000 of acceunts payable incurred in Apeil fer manufacturing casts. Ail seling and administrative expenses are paid in cash in the period they are incurred, An estimated income tax payment of $13,000 wit be made in lune. 50nama s regular quarterly divend of $10,000 is expected to be declured in Juse and paid in July. Management wants to maintain a minimum cash buance of $26,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cosh decrease and derfickency which should be Sonoma Housewares Inc. Cash Budget For the Three Months Ending July 31 Estimated cash receipts trom! Cash saies Coliection of accounts receivable Total cash receipts Estimated cash payments for: Manufacturing conts Selling and administrative expenses Capital expenditures Other purposes! Income tax Dividends Total cash payments Cash increase or (decrease) Cash balance at beginning of zonth Cash belance at end of month Minimum cash balance Excess (deficiency) 2. The budget indicates that thit minimum cash balance be maintained in July. This situstion can be corrected by andjor by the of the marketable securitiesy if they are held for such purposes. At the end of May and June, the cash balance will the minimum desired balance

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