Question: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for July. He plans to develop the budget from the following information:

a. Of all sales, 40 percent are cash sales.

b. Of credit sales, 45 percent are collected within the month of sale. Half of the credit sales collected within the month receive a 2 percent cash discount (for accounts paid within 10 days). Thirty percent of credit sales are collected in the following month; remaining credit sales are collected the month thereafter. There are virtually no bad debts.

c. Sales for the second two quarters of the year follow.

                                 Sales

April                        $450,000

May                          580,000

June                         900,000

July                       1,140,000

August                   1,200,000

September              1,134,000

d. The company sells all that it produces each month. The cost of raw materials equals 26 percent of each sales dollar. The company requires a monthly ending inventory of raw materials equal to the coming month's production requirements. Of raw materials purchases, 50 percent are paid for in the month of purchase. The remaining 50 percent is paid for in the following month.

e. Wages total $105,000 each month and are paid in the month incurred.

f. Budgeted monthly operating expenses total $376,000, of which $45,000 is depreciation and $6,000 is expiration of prepaid insurance (the annual premium of $72,000 is paid on January 1).

g. Dividends of $130,000, declared on June 30, will be paid on July 15.

h. Old equipment will be sold for $25,200 on July 4.

i. On July 13, new equipment will be purchased for $173,000.

j. The company maintains a minimum cash balance of $20,000.

k. The cash balance on July 1 is $27,000.

Required: Prepare a cash budget for July. Give a supporting schedule that details the cash collections from sales.