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Cash budget-Basic Grenoble Enterprises had sales of $50,400 in March and $59,900 in April. Forecast sales for May, June, and July are $70,200, $80,100, and $99,800, respectively. The firm has a cash balance of $4,900 on May 1 and wishes to maintain a minimum cash balance of $4,900. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. (1) The firm makes 22% of sales for cash, 64% are collected in the next month, and the remaining 14% are collected in the second month following sale. (2) The firm receives other income of $2,300 per month. (3) The firm's actual or expected purchases, all made for cash, are $50,100, $70,200, and $79,900 for the months of May through July, respectively. (4) Rent is $3,500 per month. (5) Wages and salaries are 11% of the previous month's sales. (6) Cash dividends of $3,400 will be paid in June. (7) Payment of principal and interest of $4,000 is due in June. (8) A cash purchase of equipment costing $6,500 is scheduled in July. (9) Taxes of $6,100 are due in June. May Sales $ March 49,500 $ 7,425 April 60,100 $ 9,015 $ $ Cash sales Lag 1 month Lag 2 months Other income Total cash receipts 69,600 10,440 38,464 10,395 1,800 61,099 $ $ $ $ March April May $ $ $ $ (50,500) (2,800) (7,212) $ Disbursements Purchases Rent Wages and salaries Dividends Principal and interest Purchase of new equipment Taxes due Total cash disbursements A $ $ (60,512) March April May 587 $ $ 4,900 $ Net cash flow Add: Beginning cash Ending cash Minimum cash Required total financing (notes payable) Excess cash balance (marketable securities) 5,487 4,900 $ $ $ 0 587 Complete the second month of the cash budget for Grenoble Enterprises below: (Round to the nearest do checking your answers.) April 60,100 $ Sales $ May 69,600 $ $ Cash sales Lag 1 month Lag 2 months Other income Total cash receipts June 80,000 12,000 44,544 12,621 1,800 $ 70,965 April May June $ $ Disbursements Purchases Rent Wages and salaries Dividends Principal and interest Purchase of new equipment Taxes due Total cash disbursements (69,500) (2,800) (8,352) (3,000) (3,500) $ $ $ $ (5,800) (92,952) April May June $ $ (21,987) 5,487 $ Net cash flow Add: Beginning cash Ending cash Minimum cash Required total financing (notes payable) $ (16,500) 4,900 $ 21,400 0 Excess cash balance (marketable securities) May June July Sales $ 69,600 $ 80,000 $ 100,300 Cash sales $ 15,045 Lag 1 month 51,200 Lag 2 months 14,616 Other income $ 1,800 Total cash receipts $ 82,661 (Round to the nearest dollar. Please input all the values in the table before checking your answers.) May June July $ $ $ $ $ (80,400) (2,800) (9,600) $ Disbursements Purchases Rent Wages and salaries Dividends Principal and interest Purchase of new equipment Taxes due Total cash disbursements $ 0 $ $ (6,100) $ 0 $ $ (98,900) May June Net cash flow Add: Beginning cash Ending cash Minimum cash Required total financing (notes payable) Excess cash balance (marketable securities) $ $ July $ (16,239) $ (16,500) (32,739) $ 4,900 $ 37,639 $ A The firm should establish a credit line of at least $ 37,639, but may need to secure three to four times this amount based on scenario analysis. (Round to the nearest dollar.)

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