Redding Company has budgeted sales revenues as follows:

Redding Company has budgeted sales revenues as follows:

                           June            July           August

Credit sales       135,000       145,000        90,000

Cash sales          90,000       255,000      195,000

Total sales         225,000       400,000      285,000

Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are:

June          300,000

July           250,000

August      105,000

Other cash disbursements budgeted: (a) selling and administrative expenses of $48,000 each month, (b) dividends of $105,000 will be paid in July, and (c) purchase of equipment in August for $30,000 cash.  The company wishes to maintain a minimum cash balance of $50,000 at the end of each month.

Instructions:

Prepare a cash budget for the months of July and August.