Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.:April$238,000May$289,000JuneSales$323,000Cost of goods sold*Gross profit163,200193,800214, 200$ 74,800$ 95, 200$108,800Operating expenses"Operating income37,40042,50045,900$ 37,400$ 52,700$ 62,900Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead).I Includes all period costs (i.e., selling, general, and administrative expenses).The company expects about 30% of sales to be cash transactions. Of sales on account, 60% are expected to be collectedin the first month after the sale is made, and 40% are expected to be collected in the second month after sale.Depreciation, insurance, and property taxes represent $20,400 of the estimated monthly cost of goods sold and $13,600of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual propertytaxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 80% are expected to bepaid in the month in which they are incurred, and the balance is expected to be paid in the following month.Current assets as of April 1, 2019, consist of cash of $23,800 and accounts receivable of $254,660 ($178,262 from Marchcredit sales and $76,398 from February credit sales). Current liabilities as of April 1 consist of $30,600 of accountspayable for product costs incurred in March; $7,820 of accrued liabilities for operating expenses incurred in March; and a$68,000, 12%, 120-day note payable that is due on April 17, 2019.An estimated income tax payment of $68,000 will be made in May. The regular quarterly dividend of $27,200 is expectedto be declared in May and paid in June. Capital expenditures amounting to $29,240 will be made in April.Required:a. Complete the monthly cash budgets for the second quarter of 2019 using the following format. Note that the endingcash balance for June is provided as a check figure. (Use 360 days year for calculations.)SEATECH INC.Cash BudgetFor the months of April, May, and June 2019AprilMayJuneBeginning cash balanceCash Receipts:$23,800From cash sales made in current month71,40086,70096,900From credit sales made in:February76,398March106,95771,305April99,960MayTotal cash available$278,555 $257,965 $96,900Cash Disbursements:For cost of goods sold/operating expenses incurred in:March$38,420April133,28033,320May161.84040.460June180,880For payment of note payable and interestFor capital expenditures29,240For payment of income taxes68,000For payment of dividends27,200Total disbursementsEnding cash balance$200,940 $263,160 $248,54077,615 $(5,195) $38,080 b. Assume that management of SeaTech Inc. desires to maintain a minimum cash balance of $19,000 at the beginning ofeach month and has arranged a $100,000 line of credit with a local bank at an interest rate of 10% to ensure theavailability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balancewould otherwise fall short of the $19,000 minimum balance. Repayments of principal and interest are to occur at the endof the earliest month in which sufficient funds are expected to be available for repayment. (Do not round intermediatecalculations. Use 360 days year for calculations.)SEATECH INC.Cash BudgetFor the months of April, May, and June 2019AprilMayJuneBeginning cash balanceCash Receipts:From cash sales made in current monthFrom credit sales made in:$23,80071,40086,70096,90076,398106,957FebruaryMarch71,305April99,96066,640May121,380Total cash availableCash Disbursements:278,555257,965 $284,920For cost of goods sold/operating expenses incurred in:March$38,420Аpril133,28033,320May161,84040,460June180,880For payment of note payable and interestFor capital expenditures29,240For payment of income taxes68,000For payment of dividends27,200Total disbursements200,940$263,160 $248,540Excess (deficiency) of cash available over disbursementsBorrowings5,195RepaymentsInterestEnding cash balance5,195 $%24

A cash budget is an estimate of a corporation's cash flows for a given time span. A cash budget is…

Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: April $238,000 Мay $289,000 June $323,000 Sales Cost of goods sold* Gross profit Operating expenses Operating income 163,200 193,800 214,200 $ 74,800 37,400 $ 37,400 $188,800 $ 95,200 42,500 $ 52,700 45,900 $ 62,900 Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead). T Includes all period costs (i.e., selling, general, and administrative expenses). The company expects about 30% of sales to be cash transactions. Of sales on account, 60% are expected to be collected in the first month after the sale is made, and 40% are expected to be collected in the second month after sale. Depreciation, insurance, and property taxes represent $20,400 of the estimated monthly cost of goods sold and $13,600 of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 80% are expected to be paid in the month in which they are incurred, and the balance is expected to be paid in the following month. Current assets as of April 1, 2019, consist of cash of $23,800 and accounts receivable of $254,660 ($178,262 from March credit sales and $76,398 from February credit sales). Current liabilities as of April 1 consist of $30,600 of accounts payable for product costs incurred in March; $7,820 of accrued liabilities for operating expenses incurred in March; and a $68,000, 12%, 120-day note payable that is due on April 17, 2019. An estimated income tax payment of $68,000 will be made in May. The regular quarterly dividend of $27,200 is expected to be declared in May and paid in June. Capital expenditures amounting to $29,240 will be made in April. Required: a. Complete the monthly cash budgets for the second quarter of 2019 using the following format. Note that the ending cash balance for June is provided as a check figure. (Use 360 days year for calculations.)