Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. Sales units Sales dollars May (Actual) June (Budget) July (Budget) August (Budget) 2,400 5,000 4,000 4,100 $ 384,000 $ 800,000 $ 640,000 $ 656,000 All sales are on credit. Collections are as follows: 22% is collected in the month of the sale, and the remaining 78% 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 $105,000 per month are paid in cash. The company's minimum cash balance at month-end is $120,000. Loans are obtained at the end of any month when the preliminary cash balance is below $120,000. Any preliminary cash balance above $120,000 is used to repay loans at month-end. This loan has a 1.0% monthly interest rate. On May 31, the loan balance is $48,500, and the company's cash balance is $120,000. 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 $324,060. 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