Star One Enterprises is preparing its budget for the quarter beginning April 1, 2012. The

following information has been forecast for the period:

A. Budgeted sales:

February $80 000 May $90 000

March $100 000 June $100 000

April $110 000 July $120 000

10% of total sales are for cash and 90% credit. 75% of credit customers pay the month after sale while 25% pay two months after sale.

B. All purchases are on one months credit. Budgeted purchases were as follows:

March $75 000, April $85 000, May $88 000 and June $90 000.

C. The annual rental for premises is $60 000. Rent is payable monthly.

D. Other expenses to be incurred are:

March April May June

$ $ $ $

Salaries and wages 15 000 12 000 12 000 10 000

Utilities 2 000 2 200 2 400 3 000

Direct costs 4 500 5 000 5 200 5 500

80% of salaries and wages are to be paid in the month due while the remainder is to paid in the

following month. Utilities are paid one month after being incurred while direct costs are paid in

the month due.

E. Selling expenses of 2% of total sales are to be paid one month after the date of sale.

F. Cash on hand on April 1st, 2012 is expected to be $48 000.

Required:

a. Prepare the cash budget for the period April1 to June 30 2012