PA8-3 Preparing Cash Budget Refer to the information in PA8-1. Iguana, Inc., had $10,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing over- head includes $150 in depreciation. During April, Iguana plans to pay $3,000 for a piece of equipment. Required: Prepare the following for Iguana for quarter 2: 1. Budgeted cash receipts. Include each month (April to June) as well as quarter 2 totals. 2. Budgeted cash payments. 3. Cash budget. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. PA8-3 Preparing Cash Budget Refer to the information in PA8-1. Iguana, Inc., had $10,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing over- head includes $150 in depreciation. During April, Iguana plans to pay $3,000 for a piece of equipment. Required: Prepare the following for Iguana for quarter 2: 1. Budgeted cash receipts. Include each month (April to June) as well as quarter 2 totals. 2. Budgeted cash payments. 3. Cash budget. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter