Pokemon House has budgeted sales revenues as follows:

June July August

Credit sales $85,000 $ 80,000 $ 72,000

Cash sales 14,000 25,000 32,000

Total sales $99,000 $105,000 $104,000

Past experience indicates that 70% of the credit sales will be collected in the month of sale and the remaining 30% will be collected in the following month. Purchases of inventory are all on credit and 60% is paid in the month of purchase and 40% in the month following purchase. Budgeted inventory purchases are:

June $45,000

July 43,000

August 40,000

Other cash disbursements budgeted: selling and administrative expenses of $14,000 each month, dividends of $30,000 will be paid in July, and purchase of a computer in August for $3,000 cash.

The company wishes to maintain a minimum cash balance of $20,000 at the end of each month. The company borrows money from the bank at 9% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $25,000. All amounts borrowed during a month are borrowed on the first day. The loan balance as of July 1 is $26,000.

Required:

Prepare, in good form and with appropriate titles, a cash budget for the month of July. Show all supporting calculations clearly.