D. Tomlinson Retail seeks your assistance in developing cash and other budget information for May, June and July. The store expects to have the following balances at the end of April Cash Accounts receivable Inventories Accounts payable S 5,800 984,000 690,000 309,626 The firm follows these guidelines in preparing its budgets Sales. All sales are on credit with terms of 3/10, n/30. Tomlinson bills customers on the last day of each month. The firm books receivables at gross amounts and collects 60% of the billings within the discount period, 25% by the end of the month, and 9% by the end of the second month. The firm's experience suggests that 6% is likely to be uncollectible and is written off at the end of the third month . Purchases and expenses. All purchases and expenses are on open account. The firm pays its payables over a two-month period with 54% paid in the month of purchase. Each month's units of ending inventory should equal 125% of the next month's cost of sales. The cost of each unit of inventory is $40 Selling and administrative expenses, of which $2,900 is depreciation, equal 15% of the current month's sales Actual and projected sales follow Units Month Dollars Units Month March $822,000 13,700 June April May Dollars 840,000 14,000 July 828,000 13,800 August $798,000 13,300 834,000 13,900 846,000 14,100 1. Prepare schedules showing budgeted merchandise purchases for May and June D. Tomlinson Retail Budgeted Merchandise Purchases May and June May June uI