CraftCo, Inc.' projected sales for the first six months of 2021 are given below: Jan. $500,000 April $490,000

Feb. $740,000 May $740,000

Mar. $380,000 June $610,000

40% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale.

Cost of goods sold is 60% of sales. Purchases are made in the month prior to the sales, and payments for purchases are made in the month of the sale. Total other cash expenses are $40,000/month.

The company's cash balance as of February 28, 2021 will be $25,000. Excess cash will be used to retire short-term borrowing (if any). CraftCo, Inc. has no short term borrowing as of February 28, 2021. Assume that the interest rate on short-term borrowing is 1% per month.

The company must have a minimum cash balance of $15,000 at the beginning of each month.

Required:

Prepare a cash budget for the months of March to May 2021.