You may use any of the Additional Resources listed in the drop-down menu above to help you complete this activity, but you are not required to do so. To access each resource, click on its name in the drop-down menu above. The controller of Sedona Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $25,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in July, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of March 1 include cash of $30,000, marketable securities of $105,000, and accounts receivable of $750,000 ($600,000 from February sales and $150,000 from January sales). Sales on account for January and February were $500,000 and $600,000, respectively. Current liabilities as of March 1 include a $120,000, 15%, 90-day note payable due May 20 and $60,000 of accounts payable incurred in February for manufacturing costs.

All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $1,800 in dividends will be received in March. An estimated income tax payment of $46,000 will be made in April. Sedona's regular quarterly dividend of $12,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $40,000.

1. Prepare a monthly cash budget for March, April, and May. If an amount is zero or blank, enter "0". Enter all amounts as positive numbers, except as indicated below.

SEDONA HOUSEWARES INC. Cash Budget For the Three Months Ending May 31, 2010
				March			April			May
Estimated cash receipts from:
Cash sales		$			$			$
Collection of accounts receivable
Dividends
Total cash receipts		$			$			$
Estimated cash payments for:
Manufacturing costs		$			$			$
Selling and administrative expenses
Capital expenditures
Other purposes:
Notes payable (including interest)
Income tax
Dividends
	Total cash payments	$			$			$
Cash increase (decrease) (Use minus sign for decreases.)		$			$			$
Cash balance at beginning of month
Cash balance at end of month		$			$			$
Minimum cash balance
Excess or (deficiency) (Use the minus sign for a deficiency)		$			$			$

You may use any of the Additional Resources listed in the drop-down menu above to help you complete this activity, but you are not required to do so. To access each resource, click on its name in the drop-down menu above. The controller of Sedona Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $25,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in July, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of March 1 include cash of $30,000, marketable securities of $105,000, and accounts receivable of $750,000 ($600,000 from February sales and $150,000 from January sales). Sales on account for January and February were $500,000 and $600,000, respectively. Current liabilities as of March 1 include a $120,000, 15%, 90-day note payable due May 20 and $60,000 of accounts payable incurred in February for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $1,800 in dividends will be received in March. An estimated income tax payment of $46,000 will be made in April. Sedona's regular quarterly dividend of $12,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $40,000. 1. Prepare a monthly cash budget for March, April, and May. If an amount is zero or blank, enter "0". Enter all amounts as positive numbers, except as indicated below