The following information has been gathered for Dunn Manufacturing, Inc.Ulysses R. Dunn, the founder, manager, and majority shareholder, is trying to get a "handle" on financial planning.Use the following information to create a monthly cash budget, monthly pro forma income statements, and monthly pro forma balance sheets for the next 2 months (April and May) for Dunn Manufacturing and U.R. Dunn.

1.All sales are on credit. The payment pattern for revenues is estimated to be as follows: 15% is collected within 15 days and an additional 15% is collected same month, 10% are paid for one month after the sale, 45% are paid for two months after the sale, 15% are paid for three months after the sale.

2.The current interest rate on Notes Payable is .25% per month of the balance (calculated based upon prior month's ending balance). No principal payments will be paid during April and May.

3.Dunn purchases raw materials each month in the amount of 25% of the predicted sales for the month after next, and 50% of next month's predicted sales. It is assumed that purchases are all on account and that the firm pays 100% of the purchases next month. The cost of raw materials averages 65% of sales.

4.Dunn pays salaries and wages of $12,000 plus 1% of sales of the current month.

5.Dunn pays health insurance costs of 2% of payroll per month.

6.Dunn pays utility bills and communication expenses of $5,225.

7.Dunn pays insurance of .75% of the previous month's ending inventory.

8.Dunn is depreciating its net fixed assets at the rate of .5% per month, based upon prior month's ending balance.

9.All other operating expenses are paid in cash on a monthly basis and average 5% sales.

10.Dunn has a payout ratio of 10% per month. Payments are made monthly.

11.The long-term debt on the Dunn balance sheet carries a 5% APR, and payments are made monthly based upon the prior month's ending balance in Long-Term Debt.

12.Taxes are at the rate of 39% of taxable income (including rebates for negative taxes).Taxes are paid in cash in the same month as incurred.

13.There is an expected Capital Expenditure in April for $125,000.

14.Sales for January, February, and March of this year were $320,000, $345,000 and $365,000, respectively.Sales forecasted for the next 4 months are (in 1,000s):

April: $500

May: $325

June: $350

July: $275

The Balance Sheet for Dunn Manufacturing as of March 31 is as follows: (Stated in 1,0005) .1 Assets Liabilities and Owners' Equity Cash S 210.00 Accounts Payable $ 177.00 Accounts Receivable 256.00 Notes Payable 219.00 Inventory 137.00 Accrued Taxes - Total Current Assets $ 903.00 Accrued Interest Total Current Liability $ 395.00 Other Assets 5 58.00 L-T Debt 650.00 Net Fixed Assets 5 674.00 Total Liabilities 51.045.00 Total Assets 5 1,635.00 Com mon Stock 150.00 Retained Earnings 439.00 Total Stockholders' Equity 3 589.00 Total LiabilitySL Stock holders' Equity $1,635.00