You have been asked to prepare a Cash Budget for Melnick Company for July 2021. Melnick is a MERCHANDISING company.The following information is available:

The cash balance on July 1 is $30,000

All sales are on account.Actual sales for May and June and expected sales for July are as follows:

May June July

Sales on Account $780,000 $640,000 $520,000

Sales are collected as follows: 40% in the month of sale and 60% in the month following sale.

Purchases of inventory will total $280,000 for July.Thirty percent of a month's inventory purchase are paid during the month of purchase.The remaining seventy percent is paid the following month.June's inventory purchases totaled $360,000.

Labour costs during July are estimated to be $118,000

Selling and administration expenses are budgeted at $125,000 for July.Of this amount, $12,000 is for depreciation.

New equipment costing $60,000 will be purchased for cash during July.

Dividends of $25,000 will be paid during July.

The company maintains a minimum cash balance of $20,000

Melnick Company has an open line of credit allowing them to borrow up to $100,000 at any time to meet cash shortages.

Required:

Prepare a Cash Budget for July indicating any financing that may be required.