Garden Sales, Inc., sells garden supplies. Managementis 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 assistin preparing a cash budget forthe quarter: a. Budgeted monthly absorption costing income statements for AprilJuly are: April May June July Sales 5 538,800 5 738,800 ,1; 433,333 5 333,303 Cost of goods sold 371,800 511,800 301,800 231,800 Gross margin 159,800 219,800 129,800 99,800 Selling and administrative expenses: Selling expense 23,800 93,800 54,800 33,800 Administrative expense1 41,500 55,200 33,800 31,800 Total selling and administrative expenses 114,500 148,200 SL800 54,800 Net operating income 5 44,500 5 ?0,300 5 41,200 5 35,800 | *lncludes $15,000 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; 80% collected in the first month following the month of sale; and the remaining 10% collected in the second month following the month of sale. February's sales totaled $155,000, and March's sales totaled $215,000. 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 $97,300. 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 $74,200. f. Dividends of $23,000 will be declared and paid in April. g. Land costing $31,000 will be purchased for cash in May. h. The cash balance at March 31 is $45,000; the company must maintain a cash balance of at least $40,000 at the end of each month. i. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of 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. 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 labs below. Required 2A Required 23 Required 3 ' Required 1 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. Total cash collections Required IA > Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and forthe 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 labs below. Required 1 Required 2A Required 23 Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June. Required inventory purchases Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and forthe 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 queson by entering your answers in the labs below. Required 1 Required 21!. Required 23 Required 3 Prepare the following for merchandise inventory, a schedule of expected cash disbursements for merchandise purchases for Jilipn'l,r May, and June, and for the quarter in total. April purchases May purchases June purchases Total cash disbursements