Archer Electronics Company’s actual sales and purchases for April and May are shown here along with forecasted sales and purchases for June through September.  

April (actual) …….sales $320,000……………..purchases $130,000        

May (actual)……..sales $300,000……………..purchases $120,000         

June (forecast)……….sales $275,000…………..purchases $ 120,000        

July (forecast)………..sales $ 275,000…………..purchases $ 180,000        

August (forecast)…….sales $ 290,000………….purchases $ 200,000        

September (forecast)…………sales $ 330,000…………..purchases $ 170,000        

The company makes 10 percent of its sales for cash and 90 percent on credit. Of the credit sales, 20 percent are collected in the month after the sale and 80 percent are collected two months later.  Archer pays for 40 percent of its purchases in the month after purchase and 60 percent two months after.

Labor expense equals 10 percent of the current month’s sales. Overhead expense equals $12,000 per month. Interest payments of $30,000 are due in June and September. A cash dividend of $50,000 is scheduled to be paid in June. Tax payments of $25,000 are due in June and September. There is a scheduled capital outlay of $300,000 in September.

Archer Electronics’ ending cash balance in May is $20,000. The minimum desired cash balance is $10,000.

Prepare a schedule of monthly cash receipts, monthly cash payments, and a complete monthly cash budget with borrowing and repayments for June through September.

The maximum desired cash balance is $50,000. Excess cash (above $50,000) is used to buy marketable securities. Marketable securities are sold before borrowing funds in case of a cash shortfall (less than $10,000).