Aztec Company sells its product for $190 per unit its actual and budgeted sales to low. Units Dollars $950,000 Aprill (actual) May (actual) June (budgeted) July (budgeted) August (budgeted) 5.000 2,000 7,500 6,000 4,300 380,000 1.425,000 1.140,000 817,000 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, 29% in the second month after the sale, and 1% proves to be uncollectible. The product's purchase price is $110 per unit. All purchases are pevable within 15 days. Thus 60% of purchases made in a month is paid in that month and the other 40% paid in the next month. The company has a policy to maintain an ending monthly Inventory of 24% of the next month's unit seles plus a safety stock of 55 units. The April 30 and May 31 actual Inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1.850.000 and are paid evenly throughout the year in cash. The company's minimum cash balance at month-end is $130,000. This minimum is maintained, necessary, by borrowing cash from the bank. If the balance exceeds $130,000, the company repays as much of the loen as it can without going below the minimum. This type of loan carries an annual 10% Interest rate. On May 31, the loan balance is $49,000, and the company's cash balance is $130,000 Required: 1. Prepare a table that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July. April Percent Collected in May June July August Credit sales from: April May June July August Amount Collected in May June July Total April August Credit sales from: April May June July August 950.000 380,000 11.425.000 1,140,000 817.000 2. Prepare a table that shows the computation of budgeted ending inventories in units) for April May June, and July June July AZTEC COMPANY Budgeted Ending Inventory For April May June and July April May Next month's budgeted sales (units) Ratio of inventory to future sales (percent) Budgeted "base" ending Inventory 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. 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 4. Prepare a table showing the computation of cash payments on 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 JU 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. Negative balances and Loan repayment amounts (if any) should be indicated with minus signs.) AZTEC COMPANY Cash Budget June and July June Beginning cash balance July Total cash available Cash disbursements: Total cash disbursements Preliminary cash balance July Ending cash balance Loan balance June Loan balance - Beginning of month Additional loan loan repayment) Loan balance - End of month