Check my work 5 Garden Sales, Inc., sels garden supplies Management is planning is cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in prepning a cash budget for the quarter 25 DO a Budgeted monthly absorption costing income statements for AprilJuly are: book April $ 720.000 504.co 216. 5590.00 56.00 500.000 625.000 420.000 350, 267.00 180.000 1500 nit Sales Cost of rods sold Gross margin Sellinistrative expenses Selling penso Administrative expense Total selling and sinistrative expenses Net operating income 90,000 109.00 71.000 50,00 59.000 65 44, 48.00 140,000 173,000 115.000 18.00 5 76,000,0 $ 65,00 $ 52,000 includes $32.000 of depreciation each month Renced b Sales are 20% for cash and 80% on account c. Sales on account are collected over a threemonth period with 10 collected in the month of sale: 70% collected in the first month folowing the month of sale, and the remaining 20% collected in the cond month following the month of sale. February's sales totaled $280.000, and March's sales totaled $295,000 d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month Accounts payable at March 31 for inventory purchases during March total $133.000 le. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 5 $100.800 Dividends of $39,000 will be declared and paid in Apni Land costing $47.000 will be purchased for cash in May h The cash balance at March 31 is 561000, the company must maintain a cash balance of at least $40.000 at the end of each month 1. The company has an agreement with a local bank that allows the company to borrow in increments of $1.000 at the beginning of each month, up to a total loan balance of $200.000 The interest rate on these loans i per month and for simplicity we will assume that interest is not compounded. The company would as far as it is able repay the loan plus accumulated interest at the end of the quarter Required 1. Prepare a schedule of expected cash collections for April May. and June, and for the quarter in total 2. Prepare the following for merchandise inventory a A merchandise purchases budget for April May, and June A schedule of expected cast distrusements for merchandise purchases for All May, and June, and for the quarter in total 3. Prepare a cash budget for April May, and Juncos well as total for the quarter Complete this on tenteras in the tabs felny d Cash budget for April, May, and June as well as in total for the quarter Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total Schedule of Expected Cash Collections April May June Quarter 5 0 0 Cash sales Sales on account February March April May June Total cash collections 0 0 0 0 $ $ 05 0 $ 0