Sebastian the manager of Ariels Treasures Limited has provided you with the forecasted income statement for the second quarter of 2021:

	April	May	June	Total
Sales	$54,000	$49,000	$62,000	$165,000
Cost of goods sold	24,300	22,500	28,200	75,000
Gross profit	29,700	26,500	33,800	90,000
Selling & administrative expense:
Selling expenses	6,000	7,800	9,200	23,000
Administrative expenses	6,500	9,300	7,600	23,400
Total expenses	12,500	17,100	16,800	46,400
Operating income	$17,200	$9,400	$17,000	$43,600

The following information has also been provided:

- Sales are 30% cash and 70% on credit

- Credit sales are collected 50% in month of sale, 30% in month following sale, 15% in the second month following the sale & 5% are never collected.

- The company maintains inventory levels of 40% of the following month cost of goods sold. Julys cost of goods sold is estimated to be $25,000.

- Inventory purchases are paid 50% in month of purchase & 50% in the following month. Mays purchases are budgeted to be $24,780

- The cash balance at May 31,2021 is expected to be $10,000. The company wants to maintain a cash balance of at least $10,000 at the end of each month.

- Dividends of $1,000 are to be paid in June 2021

- The company plans to purchase equipment of $10,000 in May & $20,000 in June.

- The company has a line of credit with the local bank that allows them to borrow up to $50,000. The interest rate is 5% and the balance of the loan at May 30, 2021 is expected to be $0.

- The administrative expense includes $1,500 of depreciation each month.

Required:

Prepare a cash budget for June 2021. You must show all work.