7. Decatur Doggie Door Companys actual sales and purchases for April and May are shown here, along with forecasted sales and purchases for June through September. Sales Purchases April (actual) $385,000 $160,000 May (actual) 365,000 150,000 June (forecast) 340,000 150,000 July (forecast) 340,000 210,000 August (forecast) 355,000 230,000 September (forecast) 395,000 225,000 The company makes 24 percent of its sales for cash and 76 percent on credit. Of the credit sales, 60 percent are collected in the month after the sale, and 40 percent are collected two months later. The company pays for 20 percent of its purchases in the month after purchase and 80 percent two months after. Labor expense equals 17 percent of the current months sales. Overhead expense equals $12,500 per month. Bond interest payments of $27,500 are due in June and September. A cash dividend of $52,500 is scheduled to be paid in June. Tax payments of $25,500 are due in June and September. There is a scheduled capital outlay of $380,000 in September. Decaturs ending cash balance in May is $22,500. The minimum desired ending monthly cash balance is $10,000. The maximum desired ending monthly cash balance is $50,000. Excess cash (above $50,000) is used to buy marketable securities. Marketable securities typically earn a small return, but for this case no return is to be calculated and the Marketable Securities are to be sold before borrowing funds on the companys established Line Of Credit (LOC) in case of a cash shortfall (less than $10,000). Prepare a schedule of monthly cash receipts, monthly cash payments, and a complete monthly cash budget with LOC borrowing and repayments for June through September. Use the tables in the text as a template for completing this problem (be sure to consider the cash sales in the receipts schedule). Round all numbers to the nearest dollar. Then, discuss Decaturs forecasting. What did you learn? What seems to be the most important consideration in preparing the forecast? For problem 7, you may copy EXCEL spreadsheets as a picture without showing the formulas for your answers in each cell.