P3. Cash budget – Basic Grenoble Enterprises had sales of $50,000 in March and $60,000 in April. Forecast sales for May, June, and July are $70,000, $80,000, and $100,000, respectively. The firm has a cash balance of $5,000 on May 1 and wishes to maintain a minimum cash balance of $5,000. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. 1) The firm makes 20% of sales for cash, 60% are collected in the next month, and the remaining 20% are collected in the second month following sale. 2) The firm receives other income of $2,000 per month. 3) The firm’s actual or expected purchases, all made for cash, are $50,000, $70,000, and $80,000 for the months of May through July, respectively. 4) Rent is $3,000 per month. 5) Wages and salaries are 10% of the previous month’s sales. 6) Cash dividends of $3,000 will be paid in June. 7) Payment of principal and interest of $4,000 is due in June. 8) A cash purchase of equipment costing $6,000 is scheduled in July. 9) Taxes of $6,000 are due in June.