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)	$450,000	$143,000
May (actual)	430,000	133,000
June (forecast)	405,000	133,000
July (forecast)	405,000	193,000
August (forecast)	420,000	213,000
September (forecast)	460,000	183,000

The company makes 20 percent of its sales for cash and 80 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 20 percent of its purchases in the month after purchase and 80 percent two months after.

Labour expense equals 25 percent of the current month's sales. Overhead expense equals $13,300 per month. Interest payments of $36,500 are due in June and September. A cash dividend of $56,500 is scheduled to be paid in June. Tax payments of $26,300 are due in June and September. There is a scheduled capital outlay of $430,000 in September.

Ellis Electronics' ending cash balance in May is $26,500. The minimum desired cash balance is $21,500.