• Equipment costing $1,500 will be purchased in cash during April.
• The company would like to maintain a cash balance of at least $4,000 at the end of each month.
• The company can borrow in even amounts of $1,000 at the beginning of each month, as needed. Borrowing is unlimited.
• The interest rate on these loans is 1% per month and interest is not compounded.
• The company will make repayments, plus interest, to the extent possible, at the end of the quarter.
• If all debt is not able to be repaid, interest cost will be based on the amount of the principal repaid only.

1. Prepare a Cash Budget for Sangiovese for the quarter ending June 30, 2020. Show activity by month and in total.
2. Prepare a Budgeted Income Statement for the quarter ending June 30, 2020. Show activity only for the quarter and not by individual months.

Merged center Clipboard Font Alignment 039 : x for 4 CDEFGHI Sales Budget April Sales in Units 5 Selling price 5 Sales in Dollars 7,800 $10 $ 78,000.00 May 9,360 $10 $ 93,600.00 June 11,700 $10 $ 117,000.00 Quarter 28,860 $10 $288,600.00 m Schedule of expected cash collections: o 2 Cash sales 3 Credit sales 4 Total collections April $54,600 15,000 $69,600 May $65,520 23,400 $88,920 June $81,900 28,080 $109,980 Quarter $202,020 66,480 $268,500 19 *5,000 x $10 x 30% E C D * 5,000 x $10 x 30% F G H 2 Merchandise purchases budget: Budgeted cost of goods Add desired ending Total needs Less beginning Required purchases April $62,400 $59,904.0 122,304 36,000 * $86,304 May $74,880 $74,880.0 149,760 59,904 $89,856 June $93,600 $34,944.0 128,544 74,880 $53,664 Quarter $230,880 $34,944 265,824 $36,000 $229,824 1For April sales: $78,000 sales x 80% cost ratio = $62,400 2At April 30: $74,800 x 80% = $59,904 At June 30: July sales $62,400 x 80% cost ratio x 80% = $39,9 B C D E F G H At June 30: July sales $62,400 x 80% cost ratio x 80% = * Given. Schedule of expected cash disbursements-merchandise purchases May June April $21,750 * 43,152 larch purchases april purchases May purchases une purchases Total disbursements $43,152 44,928 Quarter $21,750 $86,304 $89,856 $26,832 $224,742 $44,928 26,832 $71,760 $ 64,902 $88,080 * Given