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 equipment

vOlues 20.00 polnts Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarte 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 preparin cash budget for the quarter a. Budgeted monthly absorption costing income statements for April-July are July June May $ 600,000 $ 900,000 $500,000 $ 400,00C 630,000 April Sales 280,00C 350,000 420,000 Cost of goods sold 150,000 120,000 Gross margin 180,000 270,000 Selling and administrative expenses Selling expense Administrative expense 51,00 38,00 62,000 41,000 120,000 52,000 79,000 45,000 Total selling and administrative expenses 89,00 172,000 124,000 103,000 $ 56,000 $ 98,000 47,000 $ 31,00 Net operating income "Includes $20,000 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 the month of sale collected in the first month following the month of sale; and the remaining 20% collected in the secc month following the month of sale. February's sales totaled $200,000, and March's sales totaled $300,000 d Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts pay March 31 for inventory purchases during March total $126,000 e Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the fol month. The merchandise inventory at March 31 is $84.000 f Dividends of $49,000 will be declared and paid in April. g Land costing $16,000 will be purchased for cash in May h. The cash balance at March 31 is $52.000, the company must maintain a cash balance of atleast $ at the end of each month i The company has an agreement with a local bank that allows the company t0 borrow in increment $1,000 at the beginning of each month, up to a total loan balance of $200.000 The interest rate or loans is 1% per month and for simplicity we will assume that interest is not compounded The com would as far as it is able repay the loan plus accumulated interest.at the end of the quarter Required: O e Type here to search