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	$ 5,500
Accounts receivable	437,000
Inventories	309,400
Accounts payable	133,055

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 firms 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 2-month period with 54% paid in the month of purchase. Each months units of ending inventory should equal 130% of the next months cost of sales. The cost of each unit of inventory is $20. Selling, general, and administrative (SG&A) expenses, of which $2,000 is depreciation, equal 15% of the current months sales.

Actual and projected sales follow:

Month	Dollars	Units	Month	Dollars	Units
March	$354,000	11,800	June	$342,000	11,400
April	363,000	12,100	July	360,000	12,000
May	357,000	11,900	August	366,000	12,200

Required:

1. Prepare schedules showing budgeted merchandise purchases for May and June.

2. Prepare a schedule showing budgeted cash disbursements during June.

3. Prepare a schedule showing budgeted cash collections during May.

4. Determine gross and net balances of accounts receivable on May 31.