The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

	March		April		May
Sales	$106,000		$130,000		$167,000
Manufacturing costs	45,000		56,000		60,000
Selling and administrative expenses	31,000		35,000		37,000
Capital expenditures	_		_		40,000

The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in July, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of March 1 include cash of $40,000, marketable securities of $57,000, and accounts receivable of $122,750 ($93,000 from February sales and $29,750 from January sales). Sales on account for January and February were $85,000 and $93,000, respectively. Current liabilities as of March 1 include a $53,000, 12%, 90-day note payable due May 20 and $7,000 of accounts payable incurred in February for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $3,200 in dividends will be received in March. An estimated income tax payment of $16,000 will be made in April. Dash Shoes' regular quarterly dividend of $7,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $31,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for March, April, and May. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

Chapter 6: Homework Cach Budat The controller of Dash Shoes Inc. instructs You to prepara monthly cash budget for the next three months. You are presented with the folloing budget information: Murch April $106,000 130.00 S167.000 5,000 6,000 ,000 May Sales Manufacturing costs Scllna and admiristrativa axpensas 31,000 3,000 37,000 Capital expenditures The company expects to sell about 12% of its merchandise far cash Of sales on account 5ts are 2 acted tn he collatted in the month olla inq th sale and the remal der th 010 inq month sacand month tollo nq sale Depreciatan insurance, and property tax expansa rapresent s7,000 ofthe es ma ed mon y maruracuring costs. T e annual insurance premur s pad ln u and e annual property taxes re paid in November e remain er o he manuracturing custs u % are expec e to be pad ln he ont in which hey are r curred an the balance in the o ring month. 40,000 Ourent ssats as at March 1 Include cath nt $40,000, mankatable secritles o $57,0o0, and acccunts racsivable$122,750 s03,000 fram Fahruary sales and $20,750 trom anuary salRa). Sales on account tor January and Fahruary wers $85,000 and $03,onn, respectivelv. cument llabilities as of Harch 1 include o53 U00 125 90 ay ncte payable due May 2Q nd $7,000 cf accounts payable incurred in Februar or manufactu ng costs. A seling and administrat ve expenses are pa d in cash in the penod they are incurred. It ise pected that $3,200 in cidends wil bo received in March. An estinated income ta os ne t of 16,000 will be made in April. Dast Shoes eguar quarterly dividend of $7 000 is expected to be declared in April 8nd paid in Mav Ha gement desires to maintai 81 i m m cash ba ence of s31,000 1. Preparea monthly cash budget and supporting schedules for March, April, and May. Input all amounts as positive values except overall cah decrease and deficiency which shculd be indicated with a minus sign. Assume 200 davs per year for intarest calculations Cash Budget prl Hay Ex.mated cach rece pts from Cest sles 12.720 15 200 3,200 Total cash ece E, mated (ash payments to: $7.46840 8$220 3 Manufachuring cocts eling and eimmetrative ep 31000 3500 37co