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

	Units	Dollars
April (actual)	4,000	$	600,000
May (actual)	2,800		420,000
June (budgeted)	5,500		825,000
July (budgeted)	4,500		824,000
August (budgeted)	3,500		525,000

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, 24% in the second month after the sale, and 6% 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 24% of the next months unit sales plus a safety stock of 75 units. The April 30 and May 31 actual inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,284,000 and are paid evenly throughout the year in cash. The companys minimum cash balance at month-end is $150,000. This minimum is maintained, if necessary, by borrowing cash from the bank. If the balance exceeds $150,000, the company 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 $47,500, and the companys cash balance is $150,000. Required: 1. 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. 2. Prepare a schedule that shows the computation of budgeted ending inventories (in units) for April, May, June, and July. 3. Prepare the merchandise purchases budget for May, June, and July. Report calculations in units and then show the dollar amount of purchases for each month. 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 that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July.

		Percent Collected in
		April	May	June	July	August
Credit sales from:
April
May
June
July
August
		Amount Collected in
	Total	April	May	June	July	August
Credit sales from:
April	$600,000
May	420,000
June	825,000
July	675,000
August	525,000

Prepare a schedule that shows the computation of budgeted ending inventories (in units) for April, May, June, and July.

AZTEC COMPANY
Budgeted Ending Inventory
For April, May, June and July
	April	May	June	July
Next month's budgeted sales (units)
Ratio of inventory to future sales
Budgeted "base" ending inventory

Prepare the merchandise purchases budget for May, June, and July. Report calculations in units and then show the dollar amount of purchases for each month.

AZTEC COMPANY
Merchandise Purchases Budgets
For May, June, and July
	May	June	July
Required units of available merchandise
Budgeted purchases (units)
Budgeted cost of merchandise purchases

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	July
From purchases in:
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
Preliminary cash balance
Ending cash balance
Loan balance
	June	July
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance - End of month