Cash Budget The controller of Mercury Shoes Inc. instructs youto prepare a monthly cash budget for the next three months. You arepresented with the following budget information: June July AugustSales $160,000 $185,000 $200,000 Manufacturing costs 66,000 82,000105,000 Selling and administrative expenses 40,000 46,000 51,000Capital expenditures _ _ 120,000 The company expects to sell about10% of its merchandise for cash. Of sales on account, 60% areexpected to be collected in the month following the sale and theremainder the following month (second month after sale).Depreciation, insurance, and property tax expense represent $12,000of the estimated monthly manufacturing costs. The annual insurancepremium is paid in February, and the annual property taxes are paidin November. Of the remainder of the manufacturing costs, 80% areexpected to be paid in the month in which they are incurred and thebalance in the following month. Current assets as of June 1 includecash of $42,000, marketable securities of $25,000, and accountsreceivable of $198,000 ($150,000 from May sales and $48,000 fromApril sales). Sales on account in April and May were $120,000 and$150,000, respectively. Current liabilities as of June 1 include$13,000 of accounts payable incurred in May for manufacturingcosts. All selling and administrative expenses are paid in cash inthe period they are incurred. An estimated income tax payment of$24,000 will be made in July. Mercury Shoes' regular quarterlydividend of $15,000 is expected to be declared in July and paid inAugust. Management desires to maintain a minimum cash balance of$40,000. Required: 1. Prepare a monthly cash budget and supportingschedules for June, July, and August 2016. Enter all amounts aspositive numbers except for Cash (decrease) and (deficiency). Usethe minus sign to indicate an overall cash decrease and deficiency.Mercury Shoes Inc. Cash Budget For the Three Months Ending August31, 2016 June July August Estimated cash receipts from: Cash sales$ $ $ Collection of accounts receivable Total cash receipts $ $ $Estimated cash payments for: Manufacturing costs $ $ $ Selling andadministrative expenses Capital expenditures Other purposes: Incometax Dividends Total cash payments $ $ $ Cash increase or (decrease)$ $ $ Cash balance at beginning of month Cash balance at end ofmonth $ $ $ Minimum cash balance Excess or (deficiency)