Aztec Company sells its product for $200 per unit. Its actual and projected sales follow.

	Units	Dollars
April (actual)	9,500	$1,900,000
May (actual)	2,400	480,000
June (budgeted)	6,500	1,300,000
July (budgeted)	7,000	1,400,000
August (budgeted)	3,600	720,000

All sales are on credit. Recent experience shows that 28% of credit sales is collected in the month of the sale, 42% 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 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 20% of the next month?s unit sales plus a safety stock of 115 units. The April 30 and May 31 actual inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,596,000 and are paid evenly throughout the year in cash. The company?s minimum cash balance at month-end is $110,000. This minimum is maintained, if necessary, by borrowing cash from the bank. If the balance exceeds $110,000, the company 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 $31,000, and the company?s cash balance is $110,000. (Round final answers to the nearest whole dollar.)

rev: 11_19_2013

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. Percent Collected in April May April May June July August July August Credit sales from: April May June July August Amount Collected in Total June Credit sales from: April $ 1,900,000 May 480,000 June 1,300,000 July 1,400,000 August References 720,000 eBook & Resources Expanded table Learning Objective: 22-C2 Describe a master budget and the process of preparing it. Difficulty: Hard Learning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements. Check my work 2. Prepare a table that shows the computation of budgeted ending inventories (in units) for April, May, June, and July. AZTEC COMPANY Budgeted Ending Inventory For April, May, June and July April May June July Next month's budgeted sales (units) Ratio of inventory to future sales Budgeted "base" ending inventory References eBook & Resources Expanded table Learning Objective: 22-C2 Describe a master budget and the process of preparing it. Difficulty: Hard Learning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements. Check my work 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 References eBook & Resources Expanded table Learning Objective: 22-C2 Describe a master budget and the process of preparing it. Difficulty: Hard Learning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements. Check my work 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 July References eBook & Resources Expanded table Learning Objective: 22-C2 Describe a master budget and the process of preparing it. Difficulty: Hard Learning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements. Check my work 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.) AZTEC COMPANY Cash Budget June and July June July Beginning cash balance Total cash available Cash disbursements: Total cash disbursements 0 0 0 $ 0 Preliminary cash balance $ Ending cash balance Loan balance June July Loan balance - Beginning of month Additional loan (loan repayment) $ Loan balance - End of month rev: 11_19_2013_QC_40413 References eBook & Resources Expanded table Learning Objective: 22-C2 Describe a master budget and the process of preparing it. Difficulty: Hard Learning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements. Check my work 0