The treasurer of Calico Dreams Company has accumulated the following budget information for the first two months of the coming fiscal year:

	March	April
Sales	$450,000	$520,000
Manufacturing costs	290,000	350,000
Selling and administrative expenses	41,400	46,400
Capital additions	250,000	-

The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are collected in full in the month of the sale, and the remainder in the month following the sale. One-fourth of the manufacturing costs are paid in the month in which they are incurred, and the other three-fourths in the following month. Depreciation, insurance, and property taxes represent $6,400 of the monthly selling and administrative expenses. Insurance is paid in February, and property taxes are paid yearly in September. A $40,000 installment on income taxes is to be paid in April. Of the remainder of the selling and administrative expenses, one-half are to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are paid in March.

Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are accounts payable of $121,500 ($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $25,000.

Required:

Prepare a monthly cash budget for March and April. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. You will not need to enter colons (:) on the statement. Negative amount should be indicated by the minus sign.

Labels
Estimated cash payments for
Estimated cash receipts from
Amount Descriptions
Capital additions
Cash balance at beginning of month
Cash balance at end of month
Cash increase (decrease)
Cash sales
Collections of accounts receivable
Excess (deficiency)
Income taxes
Manufacturing costs
Minimum cash balance
Selling and administrative expenses
Total cash receipts
Total cash payments

Calico Dreams Company

Cash Budget

For the Two Months Ending April 30

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