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 July August September
Sales $ 62,900 $ 81,100 $ 49,100
Cash payments for merchandise 42,600 32,500 33,300
Sales are 65% cash and 35% on credit. All credit sales are collected in the month following the sale. The March 31 balance sheet includes balances of $12,700 in cash, $12,700 in accounts receivable, $11,000 in accounts payable, and a $2,700 balance in loans payable. A minimum cash balance of $12,700 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 2% 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 (5% of sales), shipping (2% of sales), office salaries ($3,700 per month), and rent ($5,700 per month).
Prepare a cash budget for each of the months of April, May, and June.