The controlier of Shoe Mart inc, asks you to prepare a monthly cash bodget for the next three months. You are presented with the following butght insormation: The company expects to sell about 12% of its merchandise for cash. of soles on account, 60 \% are expected to be coluected in fut in the month folowing the saile and the inenaininr th following momth. Depreciation, inwurance, and property tax expense represent $8,000 of the estimated monthiv manufacturing costs. The anmial insurance premium is paid in June, the annual property taves are paid in October. Of the remainder of the manufacturing costs, 75 w are expected to be paid in the month in which they are incurred and the balance in the following month, Ail sales and administrative expenses are paid in the month incurred. Current assets as of Janwary 1 indude cash of \$54,000, marketable securites of \$76,000, and accounts recevate of 5165,200 (\$123,060 from becenber saies and \$45,200 from November sales). Sales on account in November and December were $113,000 and $123,000, respectiveln Cument liactities as of lanuary 1 inchide a $71,000,124, , 50 -day note payable due March 20 and 18,000 of accounts payable incurred in December for manufacturng costs. All sellng and adminstrative expenses are paid hi cahi in the peried they are incurred. It is expected that 54,200 in dividends will be receiced is Jousy. Af ettimated income tax parment of 122 , eo0 wit be made in fobruary shoe Mart's regulier exarterty dividend of sl, 000 is expected to be declared in Februbry and posd in March. Menagenent desires to mahtain a minimum cash balance of s42.000. 1. Prepare a monthly cash budget and supporting schedules for Janusry, February, and March. Enter an increase in the month's cash bolance or an excess caah ameunt as positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations. Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Note payable (including interest) Income tax Dividends Total cash payments Cash increase (decrease) Cash balance at beginning of month Cash balance at end of month Minimum cash balance Excess (deficiency) Feedback