Prime Products hopes to borrow $65,000 on April 1 and repay it plus interest of $1,000 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 $26,500. Accounts receivable on April 1 will total $170,800, of which $146,400 will be collected during April and $19,520 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)	$ 208,000	$ 546,000	$ 270,000
Merchandise purchases	$ 152,000	$ 172,500	$ 135,000
Payroll	$ 24,400	$ 24,400	$ 19,600
Lease payments	$ 23,600	$ 23,600	$ 23,600
Advertising	$ 72,400	$ 72,400	$ 49,260
Equipment purchases			$ 78,500
Depreciation	$ 29,000	$ 29,000	$ 29,000

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 $142,500.

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 $65,000 loan is made on April 1 and repaid with interest on June 30.