I need assistance with Req 3 only, please 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, which occur during May The following information has been assembled to assist in preparing a cash budget for the quarter Budgeted monthly absorption costing income statements for AprilJuly are April May June July Sales $ 670,000 $ 840,000 $ 550,000 $ 450,000 Cost of goods sold 469,000 588,000 385,000 315,000 Gross margin 201,000 252,000 165,000 135,000 Selling and administrative expenses Selling expense 85,000 104,000 66,000 45,000 Administrative expense 47,500 64,000 40,400 43,000 Total selling and administrative expenses 132,500 168,000 106,400 88,000 Net operating income $ 68,500 $ 84,000 $ 58,600 $ 47,000 Includes $27,000 of depreciation each month Sales are 20 for cash and 80 on account Sales on account are collected over a three month period with 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 Februarys sales totaled $255,000, and Marchs sales totaled $270,000 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 is paid in the following month Accounts payable at March 31 for inventory purchases during March total $122,500 Each months 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 $93,800 Dividends of $34,000 will be declared and paid in April Land costing $42,000 will be purchased for cash in May The cash balance at March 31 is $56,000 the company must maintain a cash balance of at least $40,000 at the end of each month 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 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in Schedule of Expected Cash Collections April May June $ 134,000 $ 168,000 $ 110,000 Quarter 412,000 $ Cash sales Sales on account February March April May June Total cash collections 40,800 151,200 53,600 43,200 375,200 67,200 40,800 194,400 536,000 537,600 107,200 470,400 44,000 731,600 $ 379,600 $ 653,600 $ $ 1,764,800 Required 1 Required 2A Required 2B Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for Api Merchandise Purchases Budget April May Budgeted cost of goods sold 469 000 588 000 Add Desired ending merchandise inventory 117,600 77,000 Total needs 586,600 665,000 Less Beginning merchandise inventory 93,800 117,600 Required inventory purchases 492,800547,400 June 385,000 63,000 448,000 77,000 371,000 Required 1 Required 2A Required 2B Required 3 Prepare the following for merchandise inventory, a schedule of expected cash disbursements for mer April May, and June, and for the quarter in total Schedule of Expected Cash Disbursements for Merchandise Purchases April May June Beginning accounts payable $ 122,500 April purchases 246,400 246,400 May purchases 273,700 273,700 June purchases 185,500 Total cash disbursements $ 368,900 $ 520,100 $ 459,200 Quarter $ 122,500 492,800 547,400 185,500 $ 1,348,200

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I need assistance with Req 3 only, please! Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The

I need assistance with Req 3 only, please!

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, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:

Budgeted monthly absorption costing income statements for AprilJuly are:

	April		May		June		July
Sales	$	670,000	$	840,000	$	550,000	$	450,000
Cost of goods sold		469,000		588,000		385,000		315,000
Gross margin		201,000		252,000		165,000		135,000
Selling and administrative expenses:
Selling expense		85,000		104,000		66,000		45,000
Administrative expense*		47,500		64,000		40,400		43,000
Total selling and administrative expenses		132,500		168,000		106,400		88,000
Net operating income	$	68,500	$	84,000	$	58,600	$	47,000

*Includes $27,000 of depreciation each month.

Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 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. Februarys sales totaled $255,000, and Marchs sales totaled $270,000.
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% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $122,500.
Each months 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 $93,800.
Dividends of $34,000 will be declared and paid in April.
Land costing $42,000 will be purchased for cash in May.
The cash balance at March 31 is $56,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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.

Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in Schedule of Expected Cash Collections April May June $ 134,000 $ 168,000 $ 110,000 Quarter 412,000 $ Cash sales Sales on account: February March April May June Total cash collections 40,800 151,200 53,600 43,200 375,200 67,200 40,800 194,400 536,000 537,600 107,200 470,400 44,000 731,600 $ 379,600 $ 653,600 $ $ 1,764,800 Required 1 Required 2A Required 2B Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for Api Merchandise Purchases Budget April May Budgeted cost of goods sold 469.000 588.000 Add: Desired ending merchandise inventory 117,600 77,000 Total needs 586,600 665,000 Less: Beginning merchandise inventory 93,800 117,600 Required inventory purchases 492,800547,400 June 385,000 63,000 448,000 77,000 371,000 Required 1 Required 2A Required 2B Required 3 Prepare the following for merchandise inventory, a schedule of expected cash disbursements for mer April May, and June, and for the quarter in total. Schedule of Expected Cash Disbursements for Merchandise Purchases April May June Beginning accounts payable $ 122,500 April purchases 246,400 246,400 May purchases 273,700 273,700 June purchases 185,500 Total cash disbursements $ 368,900 $ 520,100 $ 459,200 Quarter $ 122,500 492,800 547,400 185,500 $ 1,348,200