Aztec Company sells its product for $150 per unit. Its actual and budgeted sales follow.

	Units	Dollars
April (actual)	4,500	$	675,000
May (actual)	2,600		390,000
June (budgeted)	6,000		900,000
July (budgeted)	5,000		899,000
August (budgeted)	4,200		630,000

All sales are on credit. Recent experience shows that 30% of credit sales is collected in the month of the sale, 40% in the month after the sale, 26% in the second month after the sale, and 4% proves to be uncollectible. The products purchase price is $110 per unit. 60% of purchases made in a month is paid in that month and the other 40% is paid in the next month. The company has a policy to maintain an ending monthly inventory of 18% of the next months unit sales plus a safety stock of 50 units. The April 30 and May 31 actual inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,500,000 and are paid evenly throughout the year in cash. The companys minimum cash balance at month-end is $110,000. This minimum is maintained, if necessary, by borrowing cash from the bank. If the balance exceeds $110,000, the company repays as much of the loan as it can without going below the minimum. This type of loan carries an annual 14% interest rate. On May 31, the loan balance is $44,000, and the companys cash balance is $110,000. Required: 4. Prepare a schedule showing the computation of cash payments for product purchases for June and July. 5. 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.

Prepare a schedule showing the computation of cash payments for product purchases for June and July. Cash payments on product purchases (for June and July) --------- Percent Paid in----- May June From purchases in: July May June July ------------ Amount Paid in----------- Total May June July From purchases in: May June 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. (Do not round intermediate calculations. Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar value.) AZTEC COMPANY Cash Budget June and July June July Beginning cash balance Total cash available Cash payments for: Total cash payments 100 Preliminary cash balance Ending cash balance $ 0 $ 0 Loan balance June July Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month