May was Frost's Frozen Treats first month in business. It provided the following cash budget information: Cash collection and disbursement activity Sales revenue Purchases of raw material Conversion costs Direct labour wages Management salaries General operating expenses May June July $85,100 $62,900 $67,100 $49,200 August September October $50,800 $68,200 $7,664 $7,240 $7,500 $2,022 $1,904 $2,323 $6,850 $6,900 $7,575 $2,377 $1,327 $1,475 $30,360 $22,440 $23,958 $17,556 $18,150 $24,354 $25,417 $25,417 $25,417 $25,417 $25,417 $25,417 $2,390 $2,390 $2,390 $2,390 $2,390 $2,390 Cash collections: Cash sales 25% Credit collections: Amount collected in month of sale 50% Amount collected in month following sale 30% Amount collected in second month following sale 15% Uncollectable 5% Cash disbursements: Conversion costs Raw materials 100% Paid in month incurred 60% Paid in month incurred 40% Paid in month following 50% Paid in month incurred 50% Paid in month following Paid in month incurred Direct labour Remaining expenses 100% Additional notes: Depreciation included in monthly general operating expenses Annual dividend payment to the shareholders, paid in August Expected July 1 beginning cash balance $ 196 $8,000 $5,000 Frost's Frozen Treats can borrow funds from its bank in $1,000 increments. The company wants to maintain a minimum balance in the bank of $5,000. Interest is paid the following month on the balance due the previous month at a rate of 1.5% per month and any loans are paid in $1,000 increments as soon as the company is able to while still maintaining the $5,000 minimum balance. Required: Prepare a cash budget for the six-month period.