Billy Yang, Inc. is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted:

	April	May
Sales	$150,000	$157,500
Merchandise purchases	107,000	112,400
Operating expenses:
Payroll	13,600	14,280
Advertising	5,400	5,700
Rent	2,600	2,600
Depreciation	7,500	7,500
End of April balances:
Cash	30,000
Bank loan payable	26,000

Additional data: (1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000. (2) Purchases are all on credit, with 40% paid in the month of purchase and the balance paid in the following month. (3) Operating expenses are paid in the month they are incurred. (4) A minimum cash balance of $25,000 is required at the end of each month. (5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available. Prepare the company's cash budget for the month of May. Show the ending loan balance at May 31. You must show your work for credit. You must use the template on the next page. (8 points) Checks: Preliminary cash balance should be a number between $40,000 and $45,000. Loan balance at end of month should be a number between $7,000 and $8,000.

Billy Yang, Inc Cash Budget For the Month of May

Beginning cash balance

Cash receipts from sales (a)

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Beginning cash plus cash receipts

Cash disbursements:

Payments for merchandise (b)

Other (List each item by name and amount):

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Total cash disbursements

Preliminary cash balance

Loan repayment $

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Cash balance, ending $

Loan balance, end of month $

Show work for all numbers above or below. Make sure you show how you calculated