Exercise 22-31A 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 Sales Cash payments for merchandise April $ 32,000 20, 200 May $ 40,000 16, 800 June $ 24,000 17, 200 Sales are 50% cash and 50% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $12,000 in cash, $12,000 in accounts receivable, $11,000 in accounts payable, and a $2,000 balance in loans payable. A minimum cash balance of $12,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% 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 (10% of sales), shipping (2% of sales), office salaries ($5,000 per month), and rent ($3,000 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.) Answer is not complete. CASTOR, INC. Cash Budget For April, May, and June April $ 12,000 28,000 X June $ May 12,000 36,000 X Beginning cash balance Cash sales $ 12,000 42,000 x 0 0 Total cash available Cash payments for: Merchandise 20,200 36 x Interest on bank loan 17,200 14 X 2,400 Sales commissions 3.200 16,800 77 X 4,000 800 5,000 3,000 640 480 Shipping Office salaries Rent 5,000 5,000 3,000 3,000 > 29,677 28,094 25,906 X Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 18,323 X 6,323 X 12,000 X 1,353 X 24,534 X 7,924 X 4,076 X 12,000 Loan balance April $ 2,000 May June Loan balance - Beginning of month $ 6,323 Additional loan (loan repayment) 6,323 1,353 7,676 Loan balance - End of month $ 6,323 $