Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:

1. Budgeted monthly absorption costing income statements for April-July are:

April May June July Sales $ 590,090 $1, 030,000 $ 480,000 $ 380,090 Cost of goods sold 350, 000 721, 000 336, 090 266,090 Gross margin 150, 090 309, 090 144 , 900 114, 090 Selling and administrative expenses: Selling expense 97, 090 98, 090 59,090 38, 090 Administrative expense* 44 , 090 59, 200 36, 800 36,090 Total selling and administrative expenses 141, 090 157 , 200 95, 800 74 ,090 Net operating income $ 9,000 $ 151, 800 $ 48, 200 $ 40,090 *Includes $21,000 of depreciation each month