Ach budget is being prepared for Hotels Inc for the month of May. The following information has been gathered to assist in preparing the budget: a Budgeted sales and production requirements are as follows: Budgeted Sales $ 650,000 Production requirements Raw material to be used S 301.000 Direct labour cost 85,000 b. Customers are allowed a 2% cash discount on accounts paid within 10 days after the end of the month of sale. Only 50% of the payments made in the month following sale fall within the discount period. Accounts receivable outstanding at April 30 were as follows: Sales Accounts Percentage Percentage to receivable at of sales be collected April 30 Uncollected in May at April 30 January s $ 8.500 2.5% 340,000 February 530.000 31,800 6.0% 2 March 470,000 47,000 10.0% ? April 550.000 550,000 100.0% ? Month 2 All January receivables outstanding will be collected in May and the collection pattern since the time of the sale will be the same in May as in previous months. d. Raw material purchases are paid in the month following the purchase and $ 320,000 in accounts payable for purchases was outstanding at the end of April. e. Accrued wages on April 30 were $ 11,000. All May payroll amounts will be paid within the month of May. f. Budgeted operating expenses and overhead cost for May are as follows: Total Overhead and other charges Indirect labour Property taxes Depreciation Utilities Wage benefits Fire insurance expired Amortization of patents $ 34,000 1,500 25,000 1,500 9,000 1,500 5,000 Spoilage of materials in 1,500 $ 79000 the warehouse Sales Salaries 45,000 Administrative salaries 15,000 g. Property taxes are paid in July of each year. h. Utilities are billed and paid within the month. i. Shipping cost for May will be $1,000 all payable in the month. j. The cash balance at April 30" was $5,750. Required 1. Prepare a Cash collections schedule for the month of May. 2. Prepare a cash budget for May in good form. Hotels Inc require a minimum cash balance of $ 5,500 at the end of each month and therefore a line of credit is set up to allow for borrowings to cover any deficiency in the ending cash balance