Ramala Fracking Company's actual sales and purchases for April and May are shown here, along with forecasted sales and purchases for June through September. Sales Purchases April (actual) $770,000 $320,000 May (actual) 730,000 310,000 June (forecast) 680,000 300,000 July (forecast) 690,000 420,000 August (forecast) 710,000 460,000 September (forecast) 795,000 455,000 The company makes 22 percent of its sales for cash and 78 percent on credit. Of the credit sales, 60 percent are collected in the month after the sale, and 40 percent are collected two months later. The company pays for 20 percent of its purchases in the month after purchase and 80 percent two months after. Labor expense equals 19 percent of the current month's sales. Overhead expense equals $18,500 per month. Bond interest payments of $55,000 are due in June and September. A cash dividend of S105,000 is scheduled to be paid in June. Tax payments of $50,000 are due in June and September. There is a scheduled capital outlay of $771,000 in September Ending cash balance in May is $45,000. The minimum detured ending monthly cash balance is $20,000. The maximum desired ending monthly cash balance is $100,000. Excess cash (above $100,000) is used to buy marketable securities Marketable securities typically carn a small retur, but for this case no return is to be calculated and the Marketable Securities are to be sold before borrowing funds on the company's established Line of Credit (LOC) in case of a cash shortfall (less than $20,000) Prepare a schedule of monthly cash receipts, monthly cash payments, and a complete monthly cash budget with LOC borrowing and repayments for June through September. Use the tables in the text as a template for completing this problem (be sure to consider the cash sales in the receipts schedule). Round all numbers to the nearest dollar Then, discuss the company's forecasting. What did you learn? What seems to be the most important consideration in preparing the forecast? Kamala Fracking Company Cash Budget June July August September Cash receipts Cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly LOC borrowing Cor repayment) Cumulative LOC loan balance Marketable securities chased Marketable Securities Sold Cumulative marketable securities Ending cash balance