Module 6 Graded Assignment TO Industries prepares monthly cash budgets. The following budget information is available for April and May 2021: April May Sales $650,000 $700,000 Direct material purchases 220,000 240,000 Direct labor 175,000 180,000 Manufacturing overhead 120,000 130,000 Selling and administrative expenses 150,000 150,000 All sales are credit sales. The company expects to collect 65% from customers in the month of the sale and the remaining 35% in first month following the sale. The company purchases direct materials on account. The company pays for 70% of the purchases in the month of the purchases and the remaining 30% in the first month following the purchase. Direct labor, manufacturing overhead, and selling and administrative expenses are paid in cash in the month incurred. Additional information: March 2021 credit sales were $600,000 March 2021 purchases of direct materials were $200,000 The company's cash balance on April 1, 2021 is expected to be $90,000 The company wants to maintain a minimum cash balance of $80,000 and has a line of credit in the amount of 1,000,000, with an annual interest rate of 6%, available to borrow if the budgeted cash balance falls below that level. Any amounts borrowed on the line of credit at the end of a month require a cash interest payment in the subsequent month. If the ending cash balance in a month exceeds the minimum balance, the excess amount is used to repay any amounts borrowed on the line of credit. Requirement 1: Prepare a schedule of cash collections from credit sales for April and May 2021 Schedule of cash collections for April & May 2021 April May Total $422,500 $455,000 $877,500 Collection on current month Sale -65% of current sale) Previous month sale collection (35%* Previous month sale) Total cash Collection $210,000 $632,500 $227,500 $682,500 $437,500 $1,315,000 Requirement 2: Prepare a schedule of cash disbursement for direct material purchases for April and May 2021 Schedule of Cash disbursements April May 2 months Opening balance accounts payable (30% of $200,000 April purchase May Purchase Total Cash Payments $60,000 $154,000 $66,000 $168,000 $234,000 $60,000 $220,000 $168,000 $448,000 $214,000 Requirement 3: Prepare a cash budget for April and May 2021 in columnar format. l Question answer step by step