July		August		September
Sales	$136,000		$166,000		$220,000
Manufacturing costs	57,000		71,000		79,000
Selling and administrative expenses	39,000		45,000		48,000
Capital expenditures	_		_		53,000

The company expects to sell about 12% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $6,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 75% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of May 1 include cash of $52,000, marketable securities of $73,000, and accounts receivable of $151,700 ($119,000 from April sales and $32,700 from March sales). Sales on account for March and April were $109,000 and $119,000, respectively. Current liabilities as of May 1 include $10,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $20,000 will be made in June. Sonomas regular quarterly dividend of $6,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $41,000.

$ 16,320 $ 19,920 $ 26,400 Estimated cash receipts from: Cash sales Collection of accounts receivable Total cash receipts Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends $ $ Total cash payments Cash increase or (decrease) Cash balance at beginning of month Cash balance at end of month Minimum cash balance $ $ $ Excess (deficiency)