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 $ 101,400 468,000 281,600 143,658 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 2-month period with 54% paid in the month of purchase. Each month's units of ending inventory should equal 110% of the next month's cost of sales. The cost of each unit of inventory is $20. Selling, general, and administrative (SG&A) expenses, of which $1,800 is depreciation, equal 15% of the current month's sales. Actual and projected sales follow: Month March Dollars April May Units $ 381,000 12,700 June 390,000 13,000 July 384,000 12,800 Month August Dollars $ 369,000 387,000 393,000 13,100 Units 12,300 12,900 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. Required 1 Required 2 Required 3 Required 4 Prepare schedules showing budgeted merchandise purchases for May and June. Cost of Goods Sold Total needed D. Tomlinson Retail Budgeted Merchandise Purchases Budgeted merchandise purchases May and June May June July Required 1 Required 2 Required 3 Required 4 Prepare a schedule showing budgeted cash disbursements during June. D. Tomlinson Retail Budgeted Cash Disbursements, June Total payables Budgeted cash disbursements May June Required 1 Required 2 Required 3 Required 4 Prepare a schedule showing budgeted cash collections duri D. Tomlinson Retail Cash Collections May Within the discount period After the discount period Total cash collections Required 1 Required 2 Required 3 Required 4 Prepare a schedule showing budgeted cash collections duri D. Tomlinson Retail Cash Collections May Within the discount period After the discount period Total cash collections