Aztec Company sells its product for $180 per unit. Its actual and budgeted sales follow:

	Units	Dollars
April (actual)	4,000	$ 720,000
May (acutal)	2,000	360,000
June (budgeted)	6,000	1,080,000
July (budgeted)	5,000	900,000
August (budgeted)	3,800	684,000

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, and 30% in the second month after the sale.

Actual and budgeted product purchases are as follows:

	Units	Dollars
April (actual)	3,600	$ 396,000
May (acutal)	2,800	308,000
June (budgeted)	5,800	638,000
July (budgeted)	4,760	523,600

The product purchase price is $110 per unit. All product purchases are made on credit with 60% of purchases made in a month paid in that month and the other 40% paid in the next month.

Selling and administrative expenses for the year are $1,320,000 and are paid evenly through the yuear in cash. The companys minimum cash balance at month-end is $100,000. This minimum is maintained, if necessary, by borrowing cash from the bank. If the balance exceeds $100,000, the copany 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 $25,000, and the companys cash balance is $100,000. (Round amounts to the nearest dollar.)

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 cash payments on product purchases for June and July.

3. 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.