Map 7 Problem 20-7AA Merchandising: Preparation and analysis of cash budgets with supporting Inventory and purchases budgets LO P4 12 points Skiped Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. Unita Dollar April (actual) 3,500 $ 560,000 May (actual) 2,200 352,000 June (budgeted) 5,000 800,000 July (budgeted) 4.000 799,000 Auguet (budgeted) 4,400 704,000 OM All sales are on credit. Recent experience shows that 22% of credit sales is collected in the month of the sale, 48% in the month after the sale, 25% in the second month after the sale, and 5% proves to be uncollectible. The product's purchase price is $110 per unit 60% of purchases made in a month is paid in that month and the other 40% is paid in the next month. The company has a policy to maintain an ending monthly Inventory of 19% of the next month's unit sales plus a safety stock of 60 units. The April 30 and May 31 actual Inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1.956,000 and are paid evenly throughout the year in cash. The company's minimum cash balance at month end is $110,000. This minimum is maintained. It necessary, by borrowing cash from the bank. If the balance exceeds $110,000, the company repays as much of the loan as can without going below the minimum. This type of loan carries an annual 10% Interest rate. On May 31, the loan balance is $47,500, and the company's cash balance is $110,000. Required: 1. Prepare a schedule that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July 2. Prepare a schedule that shows the computation of budgeted ending inventories in units) for April May June, and July 3. Prepare the merchandise purchases budget for May, June, and July. Report calculations in units and then show the dollar amount of purchases for each month 4. Prepare a schedule showing the computation of cash payments for product purchases for June and July 5. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month Complete this question by entering your answers in the tabs below. 7 Complete this question by entering your answers in the tabs below. Required 5 Required 4 Required 3 Required 2 Required 1 bints Skoped Prepare a schedule that shows the computation of cash collections of its credit sales (accounts receivable) In each of the months of June and July. Percent Collected in April August June May July eBook Credit sales from: April May June July August Amount Collected in June Total April May July August Credit sales from: $ 560,000 352,000 April May June July August 800,000 640,000 704,000 Required 2 > each month. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a schedule that shows the computation of budgeted ending inventories (in units) for April, May, June, AZTEC COMPANY Budgeted Ending Inventory For April, May, June and July April May Next month's budgeted sales (units) Ratio of inventory to future sales Budgeted "base" ending inventory June July 7 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare the merchandise purchases budget for May, June, and July. Report calculations in units and then show the c amount of purchases for each month. AZTEC COMPANY Merchandise Purchases Budgets For May, Juno, and July May June July Required units of available merchandise Budgeted purchases (units) Budgeted cost of merchandise purchases Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 ped ook Prepare a schedule showing the computation of cash payments for product purchases for June and July Canh payments on product purchases (for Juno and July) Percent Pald in July From purchases in: May June July May June Amount Paid in June Total May July From purchases in: May June July