Accounting II Chapter 22 Graded Assignment Spring 2022 Aztec Company sells its product for $180 per unit. Its actual and budgeted sales follow: April (actual) May (acutal) June (budgeted) July (budgeted) August (budgeted) Units Dollars 4,000 $ 720,000 2,000 360,000 6,000 5,000 3,800 684,000 1,080,000 900,000 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) May (acutal) June (budgeted) July (budgeted) Units Dollars 3,600 $ 396,000 2,800 308,000 5,800 638,000 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 year 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 copany 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. 2. 3. Prepare a schedule that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July. Prepare a schedule that shows the computation of cash payments on product purchases for June and July. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month.