ABC Company sells its product for $180 per unit.Its actual and budgeted sales follow:

April (actual) 4,000 $720,000

May (actual) 2,000 360,000

June (budgeted) 6,000 1,080,000

July (budgeted) 5,000 900,000

August (budgeted) 3,800 684,000

All sales are on credit.Recent experience shows that 20% of credit sales is collected in the month of the sale, 50% in the month after the sale, and 30% in the second month after the sale.

Actual and budgeted product purchases are as follows:

April (actual) 3,600 $396,000

May () 2,800 308,000

June (budgeted) 5,800 638,000

July (budgeted) 4,760 523,600

The product' purchase price is $110 per unit.All product purchases are made on credit with 60% of purchases made in a month paid in that month and the other 40% paid in the next month.

Selling and administrative expenses for the year are $1,320,000 and are paid evenly through the in cash.The company's minimum cash balance at month-end is $100,000.This minimum is maintained, if necessary, by borrowing cash from the bank.If the balance exceeds $100,000, the repays as much of the loan as it can without going below the minimum.This type of loan carries an annual 12% interest rate.On May 31, the loan balance is $25,000, and the company's cash balance is $100,000.Round amounts to the nearest dollar.)

Required

1.schedule that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July.

2. schedule that shows the computation of cash payments on product purchases for June and July.

3.cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month.

This is the question, and I got answer like this but I want to know how it comes from (questions are bold)

1 Step 1 Prepare schedule of cash collection for sales

Description June July

Collection from AR

For April Sales $216,000 Blank =720000*30% Blank <------ why I multiply 30% and why july is blank?

For May Sales $180,000 $108,000 =360000*50% =360000*30%

For June Sales $216,000 $540,000 =1080000*20% =1080000*50%

For July Sales Blank $180,000 Blank =900000*20%

Total cash collection from sales $612,000 $828,000

2 Step 2 Prepare schedule of cash payment for purchases

Description June July

Payment to AP

For May Purchases $123,200 Blank <------ why I multiply 40% and why july is blank? and why it start from May not April?

For June Purchases $382,800 $255,200

For July Purchases Blank $314,160

Total cash payments for purchases $506,000 $569,360

3 Step 3 Prepare Cash Budget

Description June July

Beginning cash balance $100,000 $100,000

Total cash collection from sales $612,000 $828,000

Total cash available $712,000 $928,000

Disbursements:

Total cash payments for purchases $506,000 $569,360

S&A Expenses $110,000 $110,000 =1320000/12

Total disbursements $616,000 $679,360

Cash Surplus (Shortage) $96,000 $248,640

Borrowings $4,250 $- <------ where's the $4,250 comes from? and why July is 0?

Repayment $- $(29,250) <------ where's the $29,250 comes from?

Interest $(250) $(293) =-(25000*12%*1/12) =-(29250*12%*1/12)

Ending Cash balance $100,000 $219,098

Loan Balance:

Beginning $25,000 $29,250

Borrowings $4,250 $-

Repayment $- $(29,250)

Ending loan balance $29,250 $-

There are 4 questions and thank you for helping me.