Aztec Company sells its product for $170 per unit. Its actual and projected sales follow.

	Units	Dollars
April (actual)	5,500	$935,000
May (actual)	3,600	612,000
June (budgeted)	7,500	1,275,000
July (budgeted)	7,500	1,275,000
August (budgeted)	4,500	765,000

All sales are on credit. Recent experience shows that 26% of credit sales is collected in the month of the sale, 44% in the month after the sale, 29% in the second month after the sale, and 1% proves to be uncollectible. The products purchase price is $110 per unit. All purchases are payable within 13 days. Thus, 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 21% of the next months unit sales plus a safety stock of 190 units. The April 30 and May 31 actual inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,692,000 and are paid evenly throughout the year in cash. The companys minimum cash balance at month-end is $140,000. This minimum is maintained, if necessary, by borrowing cash from the bank. If the balance exceeds $140,000, the company repays as much of the loan as it can without going below the minimum. This type of loan carries an annual 13% interest rate. On May 31, the loan balance is $35,500, and the companys cash balance is $140,000. (Round final answers to the nearest whole dollar.)

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. (Do not round intermediate calculations.)

Answer is not complete AZTEC COMPANY Cash Budget June and July July June 140,000 140,000x Beginning cash balance 871,930V 1,069,980V Cash receipts from customers 1,209,980 1,011,930 Total cash available Cash disbursements: interest expense 384X 783,420 689,436 Payments on purchases 141.000 141.000 Selling and administrative expenses 830,820 924,420 Total cash disbursements 181,110X Preliminary cash balance (41,110)X Additional loan (loan repayment) S Ending cash balance 140,000 Loan balance June July 35,500 Loan balance Beginning of month (41,110)X Additional loan (loan repayment) Loan balance End of month