Question 6 (7 marks)
Today, June Manufacturing Inc. has asked you to prepare their cash budget for the year ending December 31, 2020.
June requires a cash balance at the beginning of each year of $50,000. The cash balance expected on January 1, 2020 is $51,250. In order to achieve the required cash balance for the beginning of 2020, June will have to take out a $60,000 line of credit. Interest at 5% is payable annually.
June maintains strict Accounts Receivable controls. All sales are made on account, payable within 30 days. 90% of the total sales are collected by the end of the year. The outstanding receivables balance expected at the end of 2019 is $60,000.
Direct materials purchases are all on account. You generally have paid 95% of purchases by year-end. The outstanding payables balance at the end of this month will be $7,000.
All other costs are paid in cash. As previously advised, June needs to maintain a $50,000 cash balance and will borrow, in increments of $10,000, in order to maintain that balance. June will repay the outstanding debt in increments of $10,000 when their cash balance can be maintained.
Other non-manufacturing operating costs include:
Sales commissions equal to 1% of total revenue.
Fixed expenses, totaling $150,000, of which 5% are salaries and 20% is depreciation. Salaries are expected to increase by 5% for 2020.
Property, plant and equipment (net) at the end of December 31, 2019 will be $2,250,000.
June has an outstanding tax bill that will be paid in 30 days of $5,000 to avoid interest charges.
When you consult the master (static) operating budget prepared for 2020, you see that:
Schedule 1: Revenue Budget total is					$660,000
Schedule 3a: Direct Materials Usage Budget total is							$142,800
Schedule 3b: Direct Materials Purchases Budget total is							$143,200
Schedule 4: Direct Manufacturing Labour Budget total is							$339,000
Schedule 5: Manufacturing Overhead Budget total is							$136,478
Schedule 7: Cost of Goods Sold Budget total is $796,178.
Required:
Prepare Junes Cash Budget.

please provide working notes.