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Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. All sales are on credit. Collections are as follows: 24% is collected in the month of the sale, and the remaining 76% is collected in the month following the sale. Merchandise purchases cost $110 per unit. For those purchases, 60% is paid in the month of purchase and the other 40% is paid in the month following purchase. The company has a policy to maintain an ending monthly inventory of 18% of the next month's unit sales. The May 31 actual inventory level of 1,080 units is consistent with this policy. Selling and administrative expenses of $142,000 per month are paid in cash. The company's minimum cash balance at month-end is $110,000. Loans are obtained at the end of any month when the preliminary cash balance is below $110,000. Any preliminary cash balance above $110,000 is used to repay loans at month-end. This loan has a 0.5% monthly interest rate. On May 31 , the loan balance is $43,500, and the company's cash balance is $110,000. Required: 1. Prepare a schedule of cash receipts from sales for each of the months of June and July. 2. Prepare the merchandise purchases budget for June and July. 3. Prepare a schedule of cash payments for merchandise purchases for June and July. Assume May's budgeted merchandise purchases is $353,320. 4. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month. Complete this question by entering your answers in the tabs below. Prepare a schedule of cash payments for merchandise purchases for June and July. Assume May's budgeted merchandi purchases is $353,320. Prepare a schedule of cash receipts from sales for each of the months of June and July. Prepare the merchandise purchases budget for June and July. \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ AZTEC COMPANY } \\ \hline \multicolumn{5}{|c|}{ Cash Budget } \\ \hline \multicolumn{5}{|c|}{ June and July } \\ \hline & \multicolumn{2}{|c|}{ June } & \multicolumn{2}{|c|}{ July } \\ \hline Beginning cash balance & $ & 110,000 & $ & 110,000 \\ \hline Add: Cash receipts from sales & & 546,560 & & 921,600 \\ \hline Total cash available & & 656,560 & & 1,031,600 \\ \hline \multicolumn{5}{|l|}{ Less: Cash payments for: } \\ \hline Merchandise purchases & & 673,200 & & 542,080 \\ \hline Selling and administrative expenses & & 142,000 & & 142,000 \\ \hline \multicolumn{5}{|l|}{ Interest expense } \\ \hline 7 & & 0 & & 0 \\ \hline Total cash payments & & 815,200 & & 684,080 \\ \hline \multicolumn{5}{|l|}{ Preliminary cash balance } \\ \hline \multicolumn{5}{|l|}{ Additional loan (loan repayment) } \\ \hline Ending cash balance & $ & 0 & $ & 0 \\ \hline \multicolumn{5}{|c|}{ Loan balance } \\ \hline & \multicolumn{2}{|c|}{ June } & & July \\ \hline Loan balance - Beginning of month & $ & 43,500 & & \\ \hline \multicolumn{5}{|l|}{ Additional loan (loan repayment) } \\ \hline Loan balance - End of month & $ & 43,500 & & \\ \hline \end{tabular}