Green Lawn Company sells garden supplies. Management is planning its cash needs for the second quarter. The following information has been assembled to assist in preparing a cash budget for the quarter:Budgeted monthly income statements for July to October are as follows: July August September OctoberSales$$540,000$ $$780,000$ $$460,000$ $$380,000$ Cost of goods sold $372,000540,000322,000266,000$ Gross margin $168,000240,000138,000114,000$ Less: Operating expenses: Selling expense $75,200108,00055,60046,800$ Administrative expense$*42,00047,40038,80036,400$ Total operating expenses $117,200155,40094,40083,200$ Net income$$50,800$ $$84,600$ $$43,600$ $$30,800*$Includes $$17,000$ in depreciation each month.Sales are $20\%$ for cash and $80\%$ on account.Sales on account are collected over a three$-$month period in the following ratio: $10\%$ collected in the month of sale, $70\%$ collected in the first month following the month of sale, and the remaining $20\%$ collected in the second month following the month of sale. Mays sales totalled $$220,000,$ and Junes sales totalled $$300,000.$Inventory purchases are paid for within $15$ days. Therefore, $50\%$ of a months inventory purchases are paid for in the month of purchase. The remaining $50\%$ are paid in the following month. Accounts payable at June $31$ for inventory purchases during June total $$108,000.$At the end of each month, inventory must be on hand equal to $20\%$ of the cost of the merchandise to be sold in the following month. The merchandise inventory at June $30$ is $$74,400.$Dividends of $$43,400$ will be declared and paid in July.Equipment costing $$15,800$ will be purchased for cash in August.The cash balance at June $30$ is $$47,600$; the company must maintain a cash balance of at least $$35,000$ at all times.The company can borrow from its bank, as needed, to bolster the cash account. Borrowings and repayments must be in multiples of $$1,000.$ Interest is due only when principal is repaid and is calculated on the amount of repayment for the duration of the time money was borrowed. All borrowings take place at the beginning of a month, and all repayments are made at the end of a month. The annual interest rate is $12\%.$ Compute interest on whole months $(1/12,2/12,$ and so forth$).$Required:$1.$ Prepare a schedule of expected cash collections from sales for each of the months July, August, and September, and for the quarter in total. Green Lawn CompanySchedule of Expected Cash CollectionsJulyAugustSeptemberQuarterCash sales$$108,000$$$156,000$$$92,000$Sales on account:MayJuneJulyAugustSeptemberTotal cash collections$$108,000$$$156,000$$$92,000$$$02.$ Prepare the following for merchandise inventory:a$.$ An inventory purchases budget for each of the months July, August, and September. Green Lawn CompanyInventory Purchases BudgetJulyAugustSeptemberBudgeted cost of goods sold$$540,000$Add: Desired ending inventoryTotal needsDeduct: Beginning inventory$74,400$Required inventory purchases b$.$ A schedule of expected cash disbursements for inventory for each of the months July, August, and September and for the quarter in total. Green Lawn CompanySchedule of Expected Cash Disbursements for InventoryJulyAugustSeptemberQuarterAccounts payable, June $30$July purchasesAugust purchasesSeptember purchasesTotal cash disbursements$$0$$$0$$$0$$$03.$ Prepare a cash budget for the third quarter, by month as well as in total for the quarter. Show borrowings from the companys bank and repayments to the bank, as needed, to maintain the minimum cash balance. $($Roundup "Borrowing" and "Repayments" answers to the nearest whole dollar amount. Any "Repayments" and "Interest" should be indicated by a minus sign.$)$ Green Lawn CompanyCash BudgetFor the Quarter Ended September $30$JulyAugustSeptemberQuarterCash balance, beginningAdd: Collections from salesTotal cash available$0000$Deduct: Disbursements:Administrative expensesDividends paidEquipment purchasesPurchases for inventorySelling expensesTotal disbursements$0000$Excess $($deficiency$)$ of cashFinancing:BorrowingsInterestRepaymentsTotal financing$0000$Cash balance, ending