Garden Sales, Inc, 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 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: Sales Cost of goods sold Gross margin Selling and administrative expenses: 660,000 830,000 540,000 440,000 462,000 581,000 378.000 308,000 198,000 249,000 162,000 132,000 44,000 39,800 42,000 86,000 67,000 82,800 57,200 46,000 Selling expense 84,000 103,000 47,000 65,000 Administrative expense* Total selling and administrative expenses Net operating income 63,200 131,000 166,200 104,800 "Includes $26,000 of depreciation each month 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 them onth of sale; 70% col ected in the first month follow gthe month of sale; and the remaining 20% collected in the second totaled $250,000, and March's sales totaled $265,000 month following the month of sale. February's sales d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of e. Each month's ending inventory must equal 20% of the cost of the merc f. Dividends of $33,000 will be declared and paid in April. purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $120,400 inventory at March 31 is $92,400. handise to be sold in the following month. The merchandise Prex 4 of S Next> g. Land costing $41,000 will be purchased for cash in May. h. The cash balance at March 31 is $55,000; the company must maintain a cash balance of at least $40,000 at the end of each month. each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. L The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of Required: 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 inventory a. A merchandise purchases budget for April, 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. Prepare 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. Required 1 Required 2A Required 2B Required 3 as well as in total for the quarter. (Cash deficiency, repayments and interest should Prepare a cash budget for April, May, and June be Indicated by a minus sign.) Garden Sales, Inc. Cash Budget For the Quarter Ended June 30 May April June Quarter Beginning cash balance complete by answers this uestion entering your Required 1 Required 2A Required 28 Required3 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. Schedule of d Cash Collections Cash sales 0 Sales on account: February March April 0 0 0 June Total cash collections $ Required 2A> b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter 3. Prepare 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. Required 1 Required 2ARequired 2B Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June s Budget April Me May June Total needs Required inventory purchases o $ Required 1 Required 2B > Com plete this question by entering your answers in the tabs below. Required 1 Required 2ARequired 2BRequired3 Prepare the following for merchandise inventory, a schedule of expected cash disbursements for merchandise purchases April, May, and June, and for the quarter in total. Schedule of Exp nts for Merchandise April May Quarter June April purchases May purchases June purchases Total cash disbursements 0 0 0 Required 2A Required 3> K Prev4 of 5l Next > Cash Budget For the Quartor Ended June 30 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayment Interest Total financing Ending cash balance o $ Requlred 28