Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. All sales are on credit. Collections are as follows: 30% is collected in the month of the sale, and the remaining 70% 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 month's unit sales. The May 31 actual inventory level of 1,050 units is consistent with this policy. Selling and administrative expenses of $119,000 per month are paid in cash. The company's 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 0.5% monthly interest rate. On May 31 , the loan balance is $46,500, and the company's 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 May's budgeted merchandise purchases is $306,680. 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. Prepare a schedule of cash receipts from sales for each of the months of June and July Prepare the merchandise purchases budget for June and July. Prepare a schedule of cash payments for merchandise purchases for June and July. Assume May's budgeted purchases is $306,680. \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ AZTEC COMPANY } \\ \hline \multicolumn{3}{|l|}{ Cash Budget } \\ \hline \multicolumn{3}{|l|}{ June and July } \\ \hline & June & July \\ \hline Beginning cash balance & 150,000 & 150,000 \\ \hline Add: Cash receipts from sales & 468,480 & 758,400 \\ \hline Total cash available & 618,480 & 908,400 \\ \hline \multicolumn{3}{|l|}{ Less: Cash payments for: } \\ \hline Merchandise purchases & 438,812 & 471,988 \\ \hline Selling and administrative expenses & 153,000 & 153,000 \\ \hline Interest expense & 365 & 1,602 \\ \hline Total cash payments & 592,177 & 626,590 \\ \hline \multirow[t]{2}{*}{ Preliminary cash balance } & 26,303 & 281,810 \\ \hline & 123,697 & (131,810) \\ \hline Ending cash balance & 150,000 & 150,000 \\ \hline \multicolumn{3}{|l|}{ Loan balance } \\ \hline & June & July \\ \hline Loan balance - Beginning of month & 36,500 & 160,197 \\ \hline Additional loan (loan repayment) & 123,697 & (131,810) \\ \hline Loan balance - End of month & 160,197 & 28,387 \\ \hline \end{tabular}