Frank's Furniture is preparing a Cash Budget for the second quarter of the coming year. Management would like to give you additional exposure to budgeting during your internship and has assigned you the task of preparing this Cash Budget. You will present this to your accounting supervisor for review.

The following data has been forecasted:

	April	May
Sales	$150,000	$157,000
Merchandise Purchases	107,000	112,400
Operating Expenses
Payroll	13,600	14,280
Advertising	5,400	5,700
Rent	2,500	2,500
Depreciation	7,500	7,500
End of April balances
Bank loan payable	26,000

Additional data:

1. Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000.

2. Purchases are all on credit, with 40% paid in the month of purchase; the balance is paid in the following month.

3. Operating expenses are paid in the month they are incurred.

4. A minimum cash balance of $25,000 is required at the end of each month.

5. Loans are used to maintain the minimum cash balance. At the end of each month; interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available.

Required:

1. Prepare the companys cash budget for May on the next page. Show the ending loan balance at May 1.

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Frank's Furniture
Cash Budget
For the month of May
Beginning cash balance		$
Cash reciepts from sales
Total		$
Cash Disbursements
Payments for merchandise	$ -
Payroll
Advertising
Rent
Interest
Total cash disbursements		$ -
Preliminary cash balance
Loan repayment
Cash balance, ending
Loan balance, end of the month		$ -