Cost 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 folloning budyec information: The company expects to sell about 15 Wh of iss merchandise for cash. Of sales on accoant, 70 te are expected to be collected in the month following the sale and the remainder the folsowng month (second month following sale). Deprecistion, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The aconual imsurance premium is psid in September, and the annual property taxes are paid in November of the temainder of the munufacturing casts, 80% are expected to be gand in the month in which they are incurred and the balance in the following month. Current assets as of May 1 indude cashi of $48,000, marketable securates of $60,000, and accounts receivable of $140,300 ( $110,000 from Apri sales and $30,300 from March sales). Sales on account for March and Aprit were $101,000 and $110,000, respectively. Current babilhies as of May 1 incluche 512,500 af accounts payable incured in Aprit for manulacturing costs. All seiling and administrative expenses are paid in cash in the penod they are incurred. An estimated income tax payment of 51 tidooo wil be inde in . hune. Eonome's regular quarteily dividend of 57,000 is expeded to be declared in lune and paid in luly. Macsgement wants to maintain a minimurn cash balance of 537,000 . Prepare a monthly cash budget and supporting schedule for May, June, and July, input all aeneants as postive values except overall cash decrease and deficiency which should be indieoted with a minus sien. Sonoma Housewares Inc. Cash Budget 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) 2. The budget indicates that the minimum Gash balance be maintained in July. This situstion can be corrected by and/or by che of the marketable securities, if they are held for such purposes. As the end of May and June, the cash balance wil the minemum desired balance