3- Fusion's has been in business since January of the current year. The company buys fresh pasta and resells it to large supermarket chains in five states. The following information pertains to Fusion's first four months of operations: Fusion's expects to open several new sales territories in May. In anticipation of increased volume, management forecasts May sales at $100,000. To meet this demand, purchases in May are budgeted at $60,000. The company maintains a gross profit margin of approximately 40 percent. All of Fusion's sales are on account. Due to strict credit policies, the company has no bad debt performance is anticipated for the remainder of the year: Percent collected in month of sale The remaining amount is paid in the following month. The company's fixed selling and expense. Variable selling and administrative expenses are budgeted at 5 percent of sales. The company pays all of its selling and administrative expenses in the month that they are incurred. Fusion's debt service is $4,000 per month. Of this amount, approximately $3,000 represents interest expense, and $1,000 is payment on the principal. The company's tax rate is approximately 25 percent. Quarterly tax payments are made at the end of Mareh, June, September, and December. Instructions a. Prepare Fusion's budgeted income statement for May. b. Prepare Fusion's cash budget for May. Assume that the company's cash balance on May 1 is $30,000