Droid Company prepares cash budgets monthly. Data from 2022 operating budgets are presented below.
	May		June
Sales	370,000		1,000,000
Direct labor	100,000		200,000
Direct materials purchases	130,000		250,000
Selling and administrative expenses	89,000		185,000
Manufacturing overhead	80,000		175,000
Fifty (50%) of payments for direct materials are made in cash in the month of purchase, and the rest is paid in the month following the purchase. All sales are on account. Collections from sales are 40% in the month of sale, 40% in the first month following the sale, and 20% in the second month following the sale. All other items above are paid in the month incurred except for manufacturing overhead, which includes $1,500 of depreciation per month.
Other data:
1. Credit sales: March 2022, $200,000; April 2022, $320,000.
2. Purchases of direct materials: April 2022, $100,000.
3. Other receipts: Maya collection of April 30, 2022, notes receivable $15,000; Juneproceeds from the sale of securities $6,000.
4. Other disbursements: Junepayment of $6,000 cash dividend.
The companys cash balance on May 1, 2022, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
Instructions
1. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for May and June.
2. Prepare a cash budget for May and June in columnar form.