Sales PurchasesApril (actual)$ 500,000$ 220,000May (actual)480,000210,000June (forecast)455,000210,000July (forecast)455,000270,000August (forecast)470,000290,000September (forecast)510,000350,000

The company makes 30 percent of its sales for cash and 70 percent on credit. Of the credit sales, 30 percent are collected in the month after the sale, and 70 percent are collected two months later. Archer pays for 30 percent of its purchases in the month after purchase and 70 percent two months after.

Labor expense equals 20 percent of the current month's sales. Overhead expense equals $13,800 per month. Interest payments of $39,000 are due in June and September. A cash dividend of $59,000 is scheduled to be paid in June. Tax payments of $26,800 are due in June and September. There is a scheduled capital outlay of $480,000 in September.

Archer Electronics' ending cash balance in May is $29,000. The minimum desired cash balance is $11,800.

a) Prepare a schedule of monthly cash receipts for June Through September

b) Prepare a schedule of monthly cash payments for June through September

c) Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cash balance is $51,800. Excess cash (above $51,800) is used to buy marketable securities. Marketable securities are sold before borrowing funds in case of a cash shortfall (less than $11,800)