Problem 22-6B Merchandising Preperation of cash budgets plans to increase the store's inventory by $60,000 in April and needs the loan to pay for inventory acquisi- for three periods) P4tions. The bank's loan officer needs more information about Sony Stereo's ability to repay the loan and During the last week of March, Sony Stereo's owner approaches the bank for an $80,000 loan to be made on April 1 and repaid on June 30 with annual interest of 12%, for an interest cost of$2,400. The owner 3 8 asks the owner to forecast the store's June 30 cash position. On April I, Sony Stereo is expected to have a S3,000 cash balance, $135.000 of accounts receivable, and $100,000 of accounts payable. Its budgeted sales, merchandise purchases, and various cash payments for the next three months follow Budgeted Fiqures* June Sales $220,000 Merchandise purchases 210,000 $300,000 180,000 $380,000 220,000 4 Cash payments 5 Payroll 6 Rent 7Other cash expenses 16,000 6,000 64.000 17,000 6,000 8,000 18,000 6,000 7.000 80,000 2.400 Repayment of bank loan 9 Interest on bank loan *Operations began in March, March sales were $180,000 and parchases were 5100,000 The budgeted April merchandise purchases include the inventory increase. All sales are on account. The company predicts that 25% of credit sales is collected in the month of the sale, 45% in the month follow- ing the sale, 20% in the second month, 9% in the third, and the remainder is uncollectible. Applying these percents to the March credit sales, for example, shows that $81,000 of the $180,000 will be collected in April. S3600 in May, and $16,200 in June. All merchandise is purchased on credit: 80% of the balance is paid in the month following a purchase and the remaining 20% is paid in the second month. For exam- ple, of the S100,000 March purchases, $80,000 will be paid in April and $20,000 in May Required Prepare a cash budget for April, May, and June. Show supporting calculations as needed Check Budgeted cash balance Api $53,000, May $44,000, June, $34,800