Score: Choose Exercise (1 only) CASH-BUDGET-2 Perez Company has a beginning balance of cash on April 1 of $20,000 Cash collections for April, May and June are expected to be $90,000, $135,000 and $90,000 respectively. Payments for direct materials for the three month period will be $40,000, $50,000, and $45,000 respectively. Direct labor costs for April, May and June are likely to be $40,000, $40,000 and $60,000 respectively. Factory overhead costs for the three month period are estimated to be $22,500, $22,500, and $25,000. Note: The factory overhead costs include factory depreciation of $2,500 each month. Selling and Administrative costs for the three months are $15,000 each month. The company plans to sell marketable securities in June in the amount of $70,000. Perez Company has a line of credit which allows the company to borrow up to $25,000 of cash, in $1,000 Increments. The company plans to maintain a minimum cash balance of $20,000 each month. On April 1, Perez borrows $25,000 on a 3-month 6% note. The interest amount will be 25,000.06 3/12-$375. CASH BUDGET Beginning Cash Balance Cash Receipts: 1 Collections from Customers Sale of Securities Total Cash Available Cash Payments: Direct Materials Direct Labor Factory Overhead Selling and Admin. Expenses Total Payments Excess or Deficiency Financing Borrowing (show as positive) Repayments with Interest Ending Cash Balance APRIL 20,000 MAY 20,375 90,000 135,000 110,000 155.375 110,000 155.375 25,000 JUNE 20.770 90.000 70,000 180,770 180.779 35,770 216,540 135,000 155,375 If there is a deficiency, or excess is less than $20,000, borrow money to bring the balance to $20,000. AMI HOD L D 800 BOD $ a W s . . D . . 888