The controller of Sonoma Housewares Inc. instructs you toprepare a monthly cash budget for the next three months. You arepresented with the following budget information: May June JulySales $107,000 $127,000 $182,000 Manufacturing costs 45,000 55,00066,000 Selling and administrative expenses 31,000 34,000 40,000Capital expenditures _ _ 44,000 The company expects to sell about12% 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 following sale).Depreciation, insurance, and property tax expense represent $7,000of the estimated monthly manufacturing costs. The annual insurancepremium is paid in September, and the annual property taxes arepaid in November. Of the remainder of the manufacturing costs, 85%are expected to be paid in the month in which they are incurred andthe balance in the following month. Current assets as of May 1include cash of $41,000, marketable securities of $58,000, andaccounts receivable of $128,400 ($94,000 from April sales and$34,400 from March sales). Sales on account for March and Aprilwere $86,000 and $94,000, respectively. Current liabilities as ofMay 1 include $10,000 of accounts payable incurred in April formanufacturing costs. All selling and administrative expenses arepaid in cash in the period they are incurred. An estimated incometax payment of $15,000 will be made in June. Sonoma’s regularquarterly dividend of $7,000 is expected to be declared in June andpaid in July. Management wants to maintain a minimum cash balanceof $32,000. Required: 1. Prepare a monthly cash budget andsupporting schedules for May, June, and July. Input all amounts aspositive values except overall cash decrease and deficiency whichshould be indicated with a minus sign.