ABC Company is preparing its master budget for the month of its calendar year. Use the following information to prepare the July cash budget for ABC Company, and answers question two and three. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on July 31.

Beginning cash balance on July 1 is $62,000.

Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale, (uncollectible accounts are negligible and can be ignored). Sales amounts are May (actual), $1,550,000, June (actual), $1,700,000, and July (budgeted),

$1,778,000.

Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are June (actual), $930,000, and July (budgeted),

$980,000.

Budgeted cash disbursements for salaries in July: $305,000.

Budgeted depreciation expense for July: $24,000.

Other cash expenses budgeted for July: $340,000.

Accrued income taxes due in July: $52,000.

Bank loan interest due in July: $8,000.

Loan payment of $60,000 if the preliminary cash balance is greater than $100,000.

Required:

Prepare a budgeted cash budget for July month.

Does it appear that ABCs Company will remain solvent, or could it be heading for a cash crisis?

What suggestions can you make to help ABC to improve the companys cash flow? a one-two page analysis of questions 2 and 3 with a minimum of 2 references