please explain which budget system should be used... confused

Garden als sells gwen supplies Management is planning its cash needs for the second quarter The company usually has to borrow money dung this quarter to support peak sales of town care curent which occur during May. The following information has been asserted to assist in preparing a cash budget for the quarter a Budgeted monthly absorpcon costing income statements for Aprile April 3626.000 134000 1000 My 3810 000 567 000 June $520.000 254100 TV Costogos Grow margin Selling and expenses expense" Totalwing and expenses wing income 12.000 July 5 420 000 294.000 126000 2.000 10 000 2000 SEO 101000 61500 HOLD 46000 TO 63000 30 500 In 2000 ot creation 20 of cash and so on account Samson recover the mother who once in the month of sale, and the remaining 20% collected in e second month of Sale 2500 50.000 my for 1 Theory the more the remaining paid in the foowing mo Rounts per 1400 rosending tot 20 cost of the tow The networfor at Mach 3 500 000 Dis of 131 000 weed La con 5000 preth Ma 13.000 the company case of a com The home company in 1000 te beginning of ac motor balance of 5300 000 Tenterest 1 menor compounded The company would pay the loans est at the dos com o nome quarental Required: 1. Prepare a schedule of expected cash collections for April May and June, and for the quarter in total Schedule of Expected Cash Collections April May June Quarter Cash sales Sales on account February March April May June Total cash collections 1. 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 February's , and a Inventory purchases are paid for wenin 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 Each montsending ventety must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 15 586,800 Land costing $39.000 will be purchased for cash in May The cash balance at March 31 $53,000, 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 31.000 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 ond of the quarter quired: Garden Sales, Inc., seils 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. a. Budgeted monthly absorption costing income statements for April-July are: Sales 5.000.000 $20.000 Cost of goods sold 4000 17.000 Gross margin 36.000 23.00 13.00 Selling and administrative expenses Seling expense 2.000 101.000 Administrative expense" 6. 51.00 Total selling and administrative expenses Net operating income 5 000 50.400 15400 Includes $24,000 of depreciation each month 2.00 b. Sales are 20% for cash and 80% on account. c. 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. February's sales totaled $230,000, and March's sales totaled $255,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's 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 $114,800. e. Each month's 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 $86,800 t. Dividends of $31.000 will be declared and paid in April. 9. Land costing $39,000 will be purchased for cash in May. h. The cash balance at March 31 is $53,000, the company must maintain a cash balance of at least $40,000 at the end of each month. 1. 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 Schedule of Expected Collectie . . Art May 0 0 5 Os BS