Herbal Care Corp., a distributor of herb-based sunscreens, is ready to begin its third quarter, in which peak sales occur. The company has requested a $40,000, 90-day loan from its bank to help meet cash requirements during the quarter. Since Herbal Care has experienced difficulty in paying off its loans in the past, the loan officer at the bank has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled: On July 1, the beginning of the third quarter, the company will have a cash balance of $44,500. b. Actual sales for the last two months and budgeted sales for the third quarter follow (all sales are on account): 250,000 May (actual) 300,000 June (actual) 400,000 July (budgeted) 600,000 August (budgeted) 320,000 September (budgeted) Past experience shows that 25% of a month's sales are collected in the month of sale, 70% in the month following sale, and 3% in the second month following sale. The remainder is uncollectible. c. Budgeted merchandise purchases and budgeted expenses for the third quarter are given below: July August September Merchandise purchases $240,000 $350,000 $175,000 45,000 50,000 40,000 Salaries and wages $130,000 $145,000 80,000 Advertising 9,000 9,000 9,000 Rent payments 10,000 10,000 10,000 Depreciation