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

May June July

Sales $$106,000$ $$136,000$ $$175,000$

Manufacturing costs $45,00058,00063,000$

Selling and administrative expenses $31,00037,00039,000$

Capital expenditures $\_\_93,000$

The company expects to sell about $10\%$ of its merchandise for cash. Of sales on account, $70\%$ 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 $$8,000$ of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, $85\%$ are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of May $1$ include cash of $$40,000,$ marketable securities of $$57,000,$ and accounts receivable of $$118,500($$$93,000$ from April sales and $$25,500$ from March sales$).$ Sales on account for March and April were $$85,000$ and $$93,000,$ respectively. Current liabilities as of May $1$ include $$10,500$ of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $$16,000$ will be made in June. Sonoma$$s regular quarterly dividend of $$8,000$ is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $$31,000.$

Required:

Question Content Area

$1.$ Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.

Sonoma Housewares Inc.

Cash Budget

For the Three Months Ending July $31$

May June July

Estimated cash receipts from:

Cash sales $fill in the blank $551346$fe$6$fe$7009\_1$

$10,600$

$fill in the blank $551346$fe$6$fe$7009\_2$

$13,600$

$fill in the blank $551346$fe$6$fe$7009\_3$

$17,500$

Collection of accounts receivable fill in the blank $551346$fe$6$fe$7009\_4$

$73,600$

fill in the blank $551346$fe$6$fe$7009\_5$

$105,100$

fill in the blank $551346$fe$6$fe$7009\_6$

$87,640$

Total cash receipts $fill in the blank $551346$fe$6$fe$7009\_7$

$84,200$

$fill in the blank $551346$fe$6$fe$7009\_8$

$90,800$

$fill in the blank $551346$fe$6$fe$7009\_9$

$25,520$

Estimated cash payments for:

Manufacturing costs $fill in the blank $551346$fe$6$fe$7009\_10$

$fill in the blank $551346$fe$6$fe$7009\_11$

$48,050$

$fill in the blank $551346$fe$6$fe$7009\_12$

$54,250$

Selling and administrative expenses fill in the blank $551346$fe$6$fe$7009\_13$

$31,000$

fill in the blank $551346$fe$6$fe$7009\_14$

$37,000$

fill in the blank $551346$fe$6$fe$7009\_15$

$39,000$

Capital expenditures fill in the blank $551346$fe$6$fe$7009\_16$

$93,000$

Other purposes:

Income tax fill in the blank $551346$fe$6$fe$7009\_17$

$16,000$

Dividends fill in the blank $551346$fe$6$fe$7009\_18$

$8,000$

Total cash payments $fill in the blank $551346$fe$6$fe$7009\_19$

$fill in the blank $551346$fe$6$fe$7009\_20$

$101,050$

$fill in the blank $551346$fe$6$fe$7009\_21$

$194,250$

Cash increase or $($decrease$)$ $fill in the blank $551346$fe$6$fe$7009\_22$

$fill in the blank $551346$fe$6$fe$7009\_23$

$-$

$fill in the blank $551346$fe$6$fe$7009\_24$

Cash balance at beginning of month fill in the blank $551346$fe$6$fe$7009\_25$

fill in the blank $551346$fe$6$fe$7009\_26$

fill in the blank $551346$fe$6$fe$7009\_27$

Cash balance at end of month $fill in the blank $551346$fe$6$fe$7009\_28$

$fill in the blank $551346$fe$6$fe$7009\_29$

$fill in the blank $551346$fe$6$fe$7009\_30$

Minimum cash balance fill in the blank $551346$fe$6$fe$7009\_31$

fill in the blank $551346$fe$6$fe$7009\_32$

fill in the blank $551346$fe$6$fe$7009\_33$

Excess $($deficiency$)$ $fill in the blank $551346$fe$6$fe$7009\_34$

$fill in the blank $551346$fe$6$fe$7009\_35$

$fill in the blank $551346$fe$6$fe$7009\_36$

Question Content Area

$2.$ The budget indicates that the minimum cash