Ellis Electronics Companys actual sales and purchases for April and May are shown here, along with forecasted sales and purchases for June through September.

Sales Purchases April (actual) $350,000 $133,000 May (actual) 330,000 123,000 June (forecast) 305,000 123,000 July (forecast) 305,000 183,000 August (forecast) 320,000 203,000 September (forecast) 360,000 173,000

The company makes 40 percent of its sales for cash and 60 percent on credit. Of the credit sales, 30 percent are collected in the month after the sale and 70 percent are collected two months after. Ellis pays for 40 percent of its purchases in the month after purchase and 60 percent two months after.

Labour expense equals 15 percent of the current month's sales. Overhead expense equals $12,300 per month. Interest payments of $31,500 are due in June and September. A cash dividend of $51,500 is scheduled to be paid in June. Tax payments of $25,300 are due in June and September. There is a scheduled capital outlay of $330,000 in September.

Ellis Electronics' ending cash balance in May is $21,500. The minimum desired cash balance is $16,500.

a. Prepare a schedule of monthly cash receipts for June through September.

Ellis Electronics Cash Receipts Schedule April May June July August September Sales $ $ $ $ $ $ Credit sales Cash sales Collections in month after sale Collections second month after sale Total cash receipts

b. Prepare the monthly cash payments for June through September.

Ellis Electronics Cash Payments Schedule

April May June July August September Purchases $ $ $ $ $ $ Payments in the month after purchase Payments second month after purchase Labour expense Overhead Interest payments Cash dividend Taxes Capital outlay Total cash payments $ $ $ $

c. Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cash balance is $50,300. Excess cash (above $50,300) is used to buy marketable securities. Marketable securities are sold before borrowing funds in case of a cash shortfall (less than $16,500). (Do not leave any empty spaces; input a 0 wherever it is required. Negative answers and amounts to be deducted should be indicated by a minus sign.)

Ellis Electronics Cash Budget

June July August September Cash receipts $ $ $ $ Cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly borrowing or (repayment) Cumulative loan balance Marketable securities purchased Marketable securities sold Cumulative marketable securities Ending cash balance $ $ $ $