Grenoble Enterprises had sales of

$ 50,100 in March and $ 60,500 in April. Forecast sales for May, June, and July are $ 70,400,$ 79,800, and $99,800 respectively. The firm has a cash balance o f$5,100 on May 1 and wishes to maintain a minimum cash balance of $5,100. Given the following data, prepare and interpret a cash budget for the months of May, June, and July.

(1) The firm makes 16 % of sales for cash, 60 % are collected in the next month, and the remaining 24 % are collected in the second month following sale.

(2) The firm receives other income of $ 1,600 per month.

(3) The firm's actual or expected purchases, all made for cash, are $ 49,700 , $ 70, 300 , and $80,100 for the months of May through July, respectively.

(4) Rent is $ 2,600 per month.

(5) Wages and salaries are 12 % of the previous month's sales.

(6) Cash dividends of $ 3,500 will be paid in June.

(7) Payment of principal and interest of $ 3,600 is due in June.

(8) A cash purchase of equipment costing $ 5,500 is scheduled in July.

(9) Taxes of $ 5,600 are due in June.

March $ 50,100 $ 8,016 April 60,500 $ 9,680 $ May 70,400 Sales Cash sales Lag 1 month Lag 2 months Other income Total cash receipts