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Exercise 20-31A Merchandising: Cash budget LO P4 Castor, Inc., is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow: Budgeted Sales Cash payments for merchandise April $30,400 23,400 May $41,600 15,200 June $25,600 15,600 Sales are 75% cash and 25% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $13,600 in cash, $13,600 in accounts receivable, $12,600 in accounts payable, and a $3,600 balance in loans payable. A minimum cash balance of $13,600 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and include sales commissions (10% of sales), shipping (2% of sales), office salaries ($6,600 per month), and rent ($4,600 per month). Prepare a cash budget for each of the months of April, May, and June. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) May June CASTOR, INC. Cash Budget For April, May, and June April $ 13,600 $ 22,800 13,600 50,000 13,600 Beginning cash balance Cash sales Collections on account Total cash available Cash payments for: Sales commissions Shipping Office salaries Rent Interest on bank loan Merchandise (23,400) (15,200) (15,600) (23,400) (15,200) (15,600) Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance April $ 3,600 May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month