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 $87,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its 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: a. On April 1. the start of the loan period, the cash balance will be $39.000. 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 b. Past experience shows that 30% of a month's sales are collected in the month of sale. 60% in the month following sale, and 8% in the second month following sale. The other 29 is bad debts that are never collected. Budgeted sales and expenses for the three- month period follow Sales (all on account) Merchandise purchases April 5242 $213. $ 1 $ 292 $ 52.5 Lease payments tie Louiment surchases Depreciation May June 561 110. Bee $ 181.5035135 1 0. 0 20. 295 5 5 5 - 5 1 1 , 51, $ 1 Merchandise purchases are puiding during the month following ourchase. Accounts payable for merchandise purchases during March, which w be paid in April toto $174.500 d. In preparing the cash budget assume that the $87,000 n wil be made in April and repaid in June. Interest on the oan will total $1.220 Required Calculate the expected cash collections for May and need the three months in total Z Prepare a cash budget by month and not for the three month period Complete this question by entering your answers in the tabs below. LOCUIOLE CHEAPELELUD CHCELL April May June Quarter Total cash collections Required 2 > Prepare a a vuuyul) indicated by a minus sign.) Prime Products Cash Budget April Quarter June May [ Beginning cash balance Add receipts: Collections from customers Total cash available Less cash disbursements: Merchandise purchases Payroll Lease payments Advertising Equipment purchases de Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments LT Interest Total financing Ending cash balance