Exercise 20-31A Merchandising: Cash budget LO P4 Castor, Inc. is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow. Budgeted April May June Salas $31,700 $40,300 $24,300 Cash payments for merchandise 20,800 16,500 16,900 Sales are 60% cash and 40% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $12,300 in cash. $12,300 in accounts receivable, $11,300 in accounts payable, and a $2,300 balance in loans payable. A minimum cash balance of $12,300 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 2% per month based on the beginning of the month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and include sales commissions (5% of sales), shipping (3% of sales), office salaries ($5,300 per month), and rent ($3,300 per month). Prepare a cash budget for each of the months of April, May, and June (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) CASTOR, INC. Cash Budget For April, May, and June May June $ Beginning cash balance Cash sales April 12,300 22,190 12,300 46,790 Collections on account Total cash available Cash payments for: Merchandise Sales commissions Shipping Office salaries 20,800 1,585 951 5,300 3,300 46 5,300 3,300 5,300 3,300 Rent Interest on bank loan 31,982 8,600 8,600 14,808 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance April May June $ 2,300 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month

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