es Garden Sales, Incorporated, sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for April-July are: Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expense Administrative expense* Total selling and administrative expenses Net operating income *Includes $29,000 of depreciation each month. April $ 690,000 483,000 207,000 87,000 48,500 135,500 $ 71,500 May $ 860,000 602,000 258,000 106,000 65,600 171,600 $ 86,400 June $570,000 399,000 171,000 68,000 42,200 110,200 $ 60,800 July $ 470,000 329,000 141,000 47,000 45,000 92,000 $ 49,000 b. Sales are 20% for cash and 80% on account. c. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February's sales totaled $265,000, and March's sales totaled $280,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $126,700. e. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 is $96,600. f. Dividends of $36,000 will be declared and paid in April.

Garden Sales, Incorporated, sells garden supplles. Management is planning its cash needs for the second quarter. The compariy usually has to borrow money during this quarter lo support peak sales of lawn care equlpment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for April-July are: b. Sales are 20x for cash and 80% on account. c. Sales on account are collecled over a three-month period with 10\% collected in the month of sole. 70% collected in the first month following the month of sale. and the remaining 20% collected in the second month following the month of sale. February's sales totaled $265,000, and March's sales totaled $280,000. d. Inventory purchases are paid for within 15 doys. Therefore, 50% of a months inventory purchases are paid for in the month of purchase. The remaining 50 w is paid in the following month. Accounts payable at March 31 for inventory purchases duting March total $26700 e. Each month's ending inventory must equal 202 of the cost of the merchandise to be sold in the foliowing month. The merchandise inventory at March 31 is $96,600. 1. Dividends of $36,000 will be dectared and paid in April. 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise imventory: 3. A merchandise purchases budget for Apri, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total 3. Prepate a cash budget for April, May, and June as well as in total for the quarter Complete this question by entering your answers in the tabs below. Prepare a schedule of expected cash collections for Aprl, May, and June, and for the quarter in total