Country Home (CH) is a daycare in Austin TX, which provides services to low-income families. Under the service contract, it bills and receives a subsidy from the State. CH bills the State and the parents monthly for the services provided in the month. The State pays 25% in the month of the billing, 50% the month after the service, and the balance in the month following that. The parents pay for the service at a reduced rate in the same month when services are provided. Please see table below for the amount billed to the State and parents.

CH's anticipates the following expenses and disbursements in the month of May:

- Personnel costs $80,000

- Payroll disbursement $75,000

- Transportation expense (gas) $1,500

- Payment to supplies $45,000

- Supply expenses $55,000

- Depreciation $25,000

- Interest expenses incurred and paid $5,000

In addition, CH plans to build an extra wing for the daycare in May. The cost of the construction is $300,000, which will be financed by a local bank upfront when construction starts. The construction will take two months with half of the cost paid in May.

CH ends the month of April with a cash balance in the amount of $35,000.

Please prepare an Operating budget and a Cash Budget for CH for the month of May.