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The president of the retailer Prime Products has just approached the company's bank with a request for a $30,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used a. On April 1, the start of the loan period, the cash balance will be $42,600. Accounts receivable on April1 will total $187,700, of which $154,500 will be collected during April and $26,200 will be collected during May. The remainder will be uncollectible b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% represents bad debts that are never collected. Budgeted sales and expenses for the three-month period follow: April June Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation $ 280,000 522,000 $ 299,000 $ 241,000 170,500 $ 139,500 $ 23,000 $ 23,000 $ 26,600 $ 23,000 $ 23,000 23,000 $ 60,400 60,400 $ 78,020 108,000 $ 28,000 $ 28,000 $ 28,000 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid during April, total $180,000 d. In preparing the cash budget, assume that the $30,000 loan will be made in April and repaid in June Interest on the loan will total $1,100 Required 1. Prepare a schedule of expected cash collections for April, May, and June, and for the three months in total Answer is complete and correct. Schedule of Expected Cash Collections April June Quarter From accounts receivable 154,500 From accounts receivable $ 154,500 $ 26,200 26,200 C From April sales From May sales From June sales Total cash collections $ 180,700 84,000. 168,00001 22,400 274,400 156,600 313,200469,800 89,70089,700 $ 238,500 350,800425,300 1,014,600