Interest expense Problem 18 The M&N Corporation, a consulting client of yours, has just completed its long-range operations budget for three years. The company has asked you to assess its ability to buy various pieces of equipment in 20X2 and 20X3. In order to respond, you need to prepare cash budgets for 20X1-20X3. Information provided to you is as follows: Sales Operating expense 20X3 20X1 20X2 $5,000,000 $6,000,000 $6,500,000 4,000,000 5,000,000 6,000,000 100,000 90,000 80,000 Depreciation 400,000 410,000 420,000 Income before taxes 500,000 500,000 Income tax provision 200,000 200,000 Net income 300,000 $ 300,000 $ -0- -0- Other information is as follows: Income tax payments Increase in accounts receivable Increase in accounts payable Reduction in LTD $150,000 $ 150,0 $150,000 $50,000 100,000 200,000 150,000 5,000 15,000 20,000 100,000 110,000 120,000 Required: Prepare a cash budget for 20X1-20X3. Assume cash on January 1, 20X1, equals $25,000.