Problem 8-24 Cash Budget with Supporting Schedules(L08-2, L084, LO8-8] Garden Sales, Inc. sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment which occur during May The following information has been assembled to assist in preparing a cash budget for the quarter a. Budgeted monthly absorption costing income statements for April-July are: April May June July Sales Cost of goods sold Cross margin Selling and administrative expenses s 590,000 $ 790,000 490,000 390,000 413,000553,000343,000273,000 77,000 237.000 147,000 11,000 80,000 4 500 39.000 0 60.037,400 37.000 Selling expense 99,000 Administrative expense Total selling and adninistrative expenses Net operating inecome 52,50o $ 78.000 $ 49,600 41.000 "Includes $22,000 of depreciation each month. b. Sales are 20% for cash and 80% on account C. Sales on account are collected over a three-month period with 10% collected in the month of Sale: 80% collected in the first month following the month of sale, and the remaining 10% collected in the second month totaled $205,000, and March's sales totaled $245,000 following the morth of sale. February's sales d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purcha ses are paid for in the month of in the following month. Accounts payable at March 31 for inventory purchases during March purchase The remaining 50% is paid total $109,900 Each month's endina inventorv must eaual 20% of the cost of the merchandise to be sold in the followina month. The merchandise e