Hammond Power Systems makes custom transformers and sells mainly to Original Equipment Manufacturers (OEMs). OEMs produce such products as: wind turbines, oil and gas pumps, and mining equipment. Actual sales for January and February as well as forecasted sales to June are provided in the table below.

Hammond Power Systems Sales Forecast ($000s)
Month	Sales
January (actual)	$50,000
February (actual)	$80,000
March	$90,000
April	$40,000
May	$85,000
June	$95,000

HPS collects its receivables as follows: 60% one month after the sale, 20% two months after the sale, and the remaining 20% three months after the sale. HPS purchases its raw materials one month in advance of sales. Materials cost 50% of sales revenues. Invoices for purchases are paid two months after the purchase. Payroll is $25M per month and SG&A expenses are $15M per month. HPS will incur a $5M expense in April to upgrade their production facility. At the end of March the cash balance is $3.5M. Prepare a cash budget for April and May and use it to answer the following questions.

PART 1

What are total cash inflows in April?

$

Question 2

PART 2

What are Hammond Power Systems purchases in May?

$

Question 3

PART 3

What are total cash outflows in April?

$

Question 4

PART 4

What is the cash balance at the end of May?