All sales are on credit. Collections are as follows: 20% is collected in the month of the sale, and the remaining 80% is collected in the month following the sale. Merchandise purchases cost $110 per unit. For those purchases, 60% is paid in the month of purchase and the other 40% is paid in the month following purchase. The company has a policy to maintain an ending monthly inventory of 21% of the next months unit sales. The May 31 actual inventory level of 1,050 units is consistent with this policy. Selling and administrative expenses of $136,000 per month are paid in cash. The companys minimum cash balance at month-end is $150,000. Loans are obtained at the end of any month when the preliminary cash balance is below $150,000. Any preliminary cash balance above $150,000 is used to repay loans at month-end. This loan has a 1.0% monthly interest rate. On May 31, the loan balance is $34,000, and the companys cash balance is $150,000. Required: 1. Prepare a schedule of cash receipts from sales for each of the months of June and July. 2. Prepare the merchandise purchases budget for June and July. 3. Prepare a schedule of cash payments for merchandise purchases for June and July. Assume Mays budgeted merchandise purchases is $289,300. 4. 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.