Hopefully these pictures are sufficient. I am unsure of how to solve this problem, please help. For capital expenditures13,760For payment of income taxesFor payment of dividends12,800Total disbursements31,84012,800Ending cash balance60,00054,40021,760b. Assume that management of SeaTech Inc. desires to malntaln a minimum cash balance of $10,000 at the beginning of each monthand has arranged a $50,000 line of credit with a local bank at an Interest rate of 10% to ensure the avallability of funds. Borrowingtransactions are to occur only at the end of months In which the budgeted cash balance would otherwise fall short of the $10,000minimum balance. Repayments of principal and Interest are to occur at the end of the earliest month in which sufficient funds areexpected to be avallable for repayment. (Use 360 days year for calculations.)SEATECH INC.Cash BudgetFor the Months of April, May, and June 2019AprilMayJuneBeginning cash balance11,200Cash Receipts:From cash sales made in current monthFrom credit sales made in:FebruaryMarchAprilMayTotal cash available11,200Cash Disbursements:For cost of goods sold/operating expenses incurred in:МarchAprilMayJuneFor payment of note payable and interestFor capital expendituresFor payment of income taxesFor payment of dividendsTotal disbursementsExcess (deficiency) of cash available over disbursementsBorrowingsRepaymentsInterestEnding cash balance April$112,000Мay$136, 000JuneSales$152,00076, 80091, 200100, 800Cost of goods soldGross profit$ 35, 200$ 44, 800$ 51, 200Operating expensesOperating income17,50020,00021,600$ 17,600$ 24, 800$ 29,600"Includes all product costs (l.e., direct matertals, direct labor, and manufacturing overhead)."Includes all period costs (I.e. selling, general, and administrative expenses).The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the firstmonth after the sale Is made, and 35% are expected to be collected In the second month after sale. Depreciation, Insurance, andproperty taxes represent $9,600 of the estimated monthly cost of goods sold and $6,400 of the estimated monthly operatingexpenses. The annual Insurance premium is paid in January, and the annual property taxes are pald in August. Of the remalnder of thecost of goods sold and operating expenses, 90% are expected to be pald in the month In which they are incurred, and the balance isexpected to be pald in the following month.Current assets as of April 1, 2019, consist of cash of $11,200 and accounts recelvable of $119,840 ($84,000 from March credit sales and$35,840 from February credit sales). Current labilitles as of April 1 consist of $14,400 of accounts payable for product costs Incurred inMarch; $3,680 of accrued llabilties for operating expenses incurred in March; and a $38,000, 12%, 120-day note payable that is due onApril 17, 2019.An estimated Income tax payment of $36,000 will be made in May. The regular quarterly dividend of $12,800 is expected to bedeclared in May and pald in June. Capital expenditures amounting to $13.760 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 balancefor June is provided as a check figure. (Use 360 days year for calculatlons.)SEATECH INC.Cash BudgetFor the Months of April, May, and June 2019AprilMayJuneBeginning cash balance11,200Cash Receipts:From cash sales made in current month44,80054,40060,800From credit sales made in:February35,840МаrchAprilMayTotal cash available91,840 S54,400 S60,800Cash Disbursements:For cost of goods sold/operating expenses incurred in:March18,080AprilMayJuneFor payment of note payable and interestFor capital.expenditures..13.760

Question

Hopefully these pictures are sufficient. I am unsure of how to solve this problem, please help. For capital expenditures13,760For payment of income taxesFor payment of dividends12,800Total disbursements31,84012,800Ending cash balance60,00054,40021,760b. Assume that management of SeaTech Inc. desires to malntaln a minimum cash balance of $10,000 at the beginning of each monthand has arranged a $50,000 line of credit with a local bank at an Interest rate of 10% to ensure the avallability of funds. Borrowingtransactions are to occur only at the end of months In which the budgeted cash balance would otherwise fall short of the $10,000minimum balance. Repayments of principal and Interest are to occur at the end of the earliest month in which sufficient funds areexpected to be avallable for repayment. (Use 360 days year for calculations.)SEATECH INC.Cash BudgetFor the Months of April, May, and June 2019AprilMayJuneBeginning cash balance11,200Cash Receipts:From cash sales made in current monthFrom credit sales made in:FebruaryMarchAprilMayTotal cash available11,200Cash Disbursements:For cost of goods sold/operating expenses incurred in:МarchAprilMayJuneFor payment of note payable and interestFor capital expendituresFor payment of income taxesFor payment of dividendsTotal disbursementsExcess (deficiency) of cash available over disbursementsBorrowingsRepaymentsInterestEnding cash balance April$112,000Мay$136, 000JuneSales$152,00076, 80091, 200100, 800Cost of goods soldGross profit$ 35, 200$ 44, 800$ 51, 200Operating expensesOperating income17,50020,00021,600$ 17,600$ 24, 800$ 29,600&#34;Includes all product costs (l.e., direct matertals, direct labor, and manufacturing overhead).&#34;Includes all period costs (I.e. selling, general, and administrative expenses).The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the firstmonth after the sale Is made, and 35% are expected to be collected In the second month after sale. Depreciation, Insurance, andproperty taxes represent $9,600 of the estimated monthly cost of goods sold and $6,400 of the estimated monthly operatingexpenses. The annual Insurance premium is paid in January, and the annual property taxes are pald in August. Of the remalnder of thecost of goods sold and operating expenses, 90% are expected to be pald in the month In which they are incurred, and the balance isexpected to be pald in the following month.Current assets as of April 1, 2019, consist of cash of $11,200 and accounts recelvable of $119,840 ($84,000 from March credit sales and$35,840 from February credit sales). Current labilitles as of April 1 consist of $14,400 of accounts payable for product costs Incurred inMarch; $3,680 of accrued llabilties for operating expenses incurred in March; and a $38,000, 12%, 120-day note payable that is due onApril 17, 2019.An estimated Income tax payment of $36,000 will be made in May. The regular quarterly dividend of $12,800 is expected to bedeclared in May and pald in June. Capital expenditures amounting to $13.760 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 balancefor June is provided as a check figure. (Use 360 days year for calculatlons.)SEATECH INC.Cash BudgetFor the Months of April, May, and June 2019AprilMayJuneBeginning cash balance11,200Cash Receipts:From cash sales made in current month44,80054,40060,800From credit sales made in:February35,840МаrchAprilMayTotal cash available91,840 S54,400 S60,800Cash Disbursements:For cost of goods sold/operating expenses incurred in:March18,080AprilMayJuneFor payment of note payable and interestFor capital.expenditures..13.760

Accepted Answer

In requirement B it is stated that the company wants to maintain a minimum cash balance of $10,000…