P9-21 Cash Budget for One Month The treasurer of Househall Company, Ltd., states, "Our monthly financial budget shows me our cash surplus or deficiency and assures me that an unexpected cash shortage will not occur." A cash budget is now being prepared for May. The following information has been gathered to assist in preparing the budget: a. Budgeted sales and production requirements are as follows: The raw materials inventory is budgeted to increase by $6,000 during the month; other inventories will not change. b. Customers are allowed a 2% cash discount on accounts paid within 10 days after the end of the month of sale. Only 50% of the payments made in the month following sale fall within the discount period. c. Accounts receivable outstanding at April 30 were as follows: Bad debts are negligible. All January receivables outstanding will have been collected by the end of May, and the collection pattern since the time of sale will be the same in May as in previous months. d. Raw materials purchases are paid in the month following purchase, and $320,000 in accounts payable for purchases was outstanding at the end of April. e. Accrued wages on April 30 were $11,000. All May payroll amounts will be paid within the month of May. f. Budgeted operating expenses and overhead costs for May are as follows: ,000,000,000 g. Real estate taxes are paid in August each year. h. Utilities are billed and paid within the month. i. The $9,000 monthly charge above for "Wage benefits" includes the following: j. Fire insurance premiums were paid in January, in advance. k. Shipping costs for May will be $1,000, all payable during the month. 1. The cash balance on April 30 was $5,750. 1. Prepare a schedule showing expected cash collections for May. 2. Prepare a cash budget for May in good form. 3. Comment briefly on the treasurer's statement quoted at the beginning of the