Prime Products hopes to borrow $30,000 on April 1 and repay it plus interest of $1,200 on June 30. The following data are available for the months April through June, during which the loan will be used:

On April 1, the start of the loan period, the cash balance will be $24,000. Accounts receivable on April 1 will total $140,000, of which $120,000 will be collected during April and $16,000 will be collected during May. The remainder will be uncollectible.

The company estimates 30% of a months 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% are bad debts that are never collected. Budgeted sales and expenses for the three-month period follow:

	April	May	June
Sales (all on account)	$ 300,000	$ 400,000	$ 250,000
Merchandise purchases	$ 210,000	$ 160,000	$ 130,000
Payroll	$ 20,000	$ 20,000	$ 18,000
Lease payments	$ 22,000	$ 22,000	$ 22,000
Advertising	$ 60,000	$ 60,000	$ 50,000
Equipment purchases			$ 65,000
Depreciation	$ 15,000	$ 15,000	$ 15,000

Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $140,000.

Required:

1. Calculate the expected cash collections for April, May, and June, and for the three months in total.
2. Prepare a cash budget, by month and in total, for the three-month period. Assume the $30,000 loan is made on April 1 and repaid with interest on June 30.