Mike Bowman, owner of Bowman Fashions and Designs wants to request a line of credit from his bank. He has estimated the following sales forecast for the firm for parts of 2016.

Month Amount Amount

May 2016 180 90

June 180 90

July 360 126

August 540 882

September 720 306

October 360 234

November 360 162

December 90 90

January 2017 180

Estimates regarding payments obtained from the credit department are as follows:

Collected within the month of sales 10%

Collected the month following the sales 75%

Collected the second month following the sale 15%

Payments for labour and raw materials are made a month after these services were provided.

General and administrative salaries are approximately $27,000 a month

Lease payment are $9,000

Depreciation charges $36,000

Miscellaneous expenses are $2,700

Income tax payments $63,000 due in September and December

Project cost on a new studio $180,000 to be paid in October

Cash on hand on July 1 will be $132,000

Prepare monthly cash budget for the last 6 months of 2016 showing closing balances and recommend action.