Developing a Master Budget for a Merchandising Organization Dils Brother Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2017. Dils Brother Department Store Balance Sheet March 31, 2017 Assets Liabilities and Stockholders' Equity Cash $ 4,000 Accounts payable $31,000 Accounts receivable 31,000 Dividends payable 15,000 Inventory 36,000 Rent payable 3,000 Prepaid Insurance 3,000 Stockholders' equity 50,000 Fixtures 25,000 Total assets $99,000 Total liabilities and equity $99,000 Actual and forecasted sales for selected months in 2017 are as follows: Month Sales Revenue January $ 70,000 February 60,000 March 50,000 April 60,000 May 70,000 June 80,000 July 100,000 August 90,000 Monthly operating expenses are as follows: Wages and salarles $ 27,000 Depreciation Utilities 1,500 Rent 3,000 100 Cash dividends of $15,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's cost of sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $4,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed. (c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2017. Do not include repayments of borrowings. Dils Brothers Department Store Schedule of Monthly Cash Disbursements Quarter Ending June 30, 2017 April May June Total Total cash disbursements $ 56,500 x $ 61,500 x $ 66,500 x $ 184,500 x