Problem 8-23 Schedule of Expected Cash Collections; Cash Budget [LO8-2, LO8-8 The president of the retailer Prime Products has just approached the company's bank with a request for a $81,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventornies. Because the company has had some difficulity in paying off ts 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 points On April 1, the start of the loan period, the cash balance will be $26,800. Accounts recevable on April 1 wil total $193 200, of which $165,600 ill be collected during April and $22.080 will be collected during May The remainder will be uncollectible experience shows that 30% of a month's sales are collected n the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected Budgeted sales and expenses for the three month period follow a Print Sales (al1 on account) $368,000 $582,000 $305,000 Merchandise purchases $275,000 $227,000 $143, 5e0 Payroll Lease payments Advertising Equipment purchases Depreciation % 32,000 32,000 23,700 38,400 38,400 38,400 $ 73,060 73,000 71,27e 85, 000 15,400 15,40015,400 References c 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 $166,000 d In preparing the cash budget, assume that the $81,000 loan will be made in Aprit and repaid in June Interest on the loan will total $1,160 Required 1 Calculate the expected cash collections for Apil, May, and June, and for the tree months in total 2 Prepare a cash budget, by month and in total, for the three month penod