Garden Sales, Incorporated, usually has to borrow money during the second quarter to support peak sales of lawn care equipment

during May. It gathered the following information to prepare a cash budget for the quarter:

a$.$ Budgeted monthly absorption costing income statements for April$-$July are:

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 $$175,000,$ and March's sales totaled $$230,000.$

d$.$ Inventory purchases are paid for within $15$ days. Therefore, $50\%$ of a month's inventory purchases are paid for in the month of

purchsse. The remaining $50\%$ are paid in the following month. Accounts poysble at March $31$ for inventory purchoses during March

total $$103,600.$

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 $$78,400.$

f$.$ Dividends of $$26,000$ will be declared and paid in April.

g$.$ Land costing $$34,000$ will be purchosed for cosh in May.

h$.$ The cosh balance at March $31$ is $$48,000$; the company must maintain a cash balance of at least $$40,000$ at the end of each month.

i$.$ The company has an agreement with o 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 interest is not compounded. The company would, as for as it is able, repay the loan plus accumulated interest at the end of

the quarter.

Required:

Prepore a schedule of expected cosh collections for April, May, and June, and for the quarter in total.

Prepore the following for merchandise inventory:

a$.$ A merchandise purchoses budget for April, May, and June.

b$.$ A schedule of expected cash disbursements for merchandise purchoses for April, Moy, and June, and for the quarter in total.

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 $1$

Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.