Grenoble Enterprises had sales of $50,100 in March and $59,700 in April. Forecast sales for May,June, and July are $70,500, $80,300, and $99,800, respectively. The firm has a cash balance of $4,700 on May 1 and wishes to maintain a minimum cash balance of

$4,700. Given the following data, prepare and interpret a cash budget for the months of May, June, and July.

(1) The firm makes 22% of sales for cash, 56% are collected in the next month, and the remaining

22% are collected in the second month following sale.

(2) The firm receives other income of $1,800 per month.

(3) The firm's actual or expected purchases, all made for cash, are $49,500, $69,600,

and 80,500 for the months of May through July, respectively.

(4) Rent is $3,000 per month.

(5) Wages and salaries are 10% of the previous month's sales.

(6) Cash dividends of $2,600 will be paid in June.

(7) Payment of principal and interest of

$3,500 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.