I set my collectiosn of accounts as May-28700+58500,June 31500+66950, July 36050+79300. I must be missing something because it is wrong. Please help me fix the wrong answers. Thank you **Monthly Cash Budget Preparation for Sonoma Housewares Inc.**The controller of Sonoma Housewares Inc. requests the preparation of a monthly cash budget for the next three months. The provided budget information includes:| | May | June | July ||-------------------|----------|----------|----------|| **Sales** | $103,000 | $122,000 | $166,000 || **Manufacturing costs** | 43,000 | 52,000 | 60,000 || **Selling and administrative expenses** | 30,000 | 33,000 | 37,000 || **Capital expenditures** | — | — | 40,000 |**Additional Information:**- Merchandise sales: 12% expected as cash sales. For account sales, 65% are collected in the month following sales, with the remainder collected the second month after.- Depreciation, insurance, and property tax expenses equal $6,000 monthly, with annual property taxes paid in November.- 80% of manufacturing costs are paid in the month incurred, the remaining 20% in the following month.- Current assets as of May 1 include cash of $39,000, marketable securities of $56,000, and accounts receivable of $118,700.- Sales on account for March and April were $82,000 and $90,000, respectively.- Current liabilities as of May 1 include $13,500 of accounts payable for April’s manufacturing costs.- All expenses are paid as incurred, with an estimated income tax payment of $15,000 in June.- A regular quarterly dividend of $6,000 is expected in June, paid in July.- Management aims to maintain a minimum cash balance of $30,000.**Requirement:**1. Prepare a monthly cash budget with supporting schedules for May, June, and July. All amounts should be positive, except for any overall cash decrease or deficiency, which should be marked with a minus sign. # Sonoma Housewares Inc. Cash Budget Overview**For the Three Months Ending July 31**This document outlines the projected cash budget for Sonoma Housewares Inc. over a three-month period.### Cash Receipts- **May:** - Cash Sales: $12,360 - Collection of Accounts Receivable: $68,340 - **Total Cash Receipts:** $80,700- **June:** - Cash Sales: $14,640 - Collection of Accounts Receivable: $98,450 - **Total Cash Receipts:** $113,090- **July:** - Cash Sales: $19,920 - Collection of Accounts Receivable: $115,350 - **Total Cash Receipts:** $135,270### Cash Payments#### Estimated Cash Payments for:- **May:** - Manufacturing Costs: $27,500 - Selling and Administrative Expenses: $30,000 - **Total Cash Payments:** $37,500- **June:** - Manufacturing Costs: $101,600 - Selling and Administrative Expenses: $33,000 - Income Tax: $15,000 - **Total Cash Payments:** $149,600- **July:** - Manufacturing Costs: $58,400 - Selling and Administrative Expenses: $37,000 - Capital Expenditures: $40,000 - Income Tax: $6,000 - **Total Cash Payments:** $141,400### Cash Flow Analysis- **Cash Increase or (Decrease):** - May: $43,200 - June: $36,510 - July: -$6,130- **Cash Balance at Beginning of Month:** - May: $39,000 - June: $82,200 - July: $118,710- **Cash Balance at End of Month:** - May: $82,200 - June: $118,710 - July: $112,580### Minimum Cash Balance- Set for each month: $30,000### Excess (Deficiency)- **May:** $52,200- **June:** $88,710- **July:** $82,580This budget serves as a financial tool to assist

Solution 1: Computation of Collection from Customer Particulars May June July Collection for…

The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $103,000 $122,000 $166,000 Manufacturing costs 43,000 52,000 60,000 Selling and administrative expenses 30,000 33,000 37,000 Capital expenditures 40,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $6,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $39,000, marketable securities of $56,000, and accounts receivable of $118,700 ($90,000 from April sales and $28,700 from March sales). Sales on account for March and April were $82,000 and $90,000, respectively. Current liabilities as of May 1 include $13,500 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $15,000 will be made in June. Sonoma's regular quarterly dividend of $6,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q