Q1. At March 31, ABC Enterprises, a merchandising firm, had an inventory of 38,000 units, and it had accounts receivable totalling $85,000. Sales, in units, have been budgeted as follows for the next four months: April |May 60,000 75,000 90,000 81,000 June July ABC's board of directors has established a policy to commence in April that the inventory at the end of each month should contain 40% of the units required for the following month's budgeted sales. The selling price is $2 per unit. One-third of sales are paid for by customers in the month of the sale, the balance is collected in the following month. Required: a. Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June. b. Prepare a schedule of expected cash collections for each of the months April, May, and June. Q2. Monty Corporation, a merchandising company, has provided the following budget data: January February March Purchases $42.000 48,000 36,000 54.000 60,000 Sales $72,000 66.000 60,000 April 78,000 66,000 May Collections from customers are normally 70% in the month of sale, 20% in the month following the sale, and 9% in the second month following the sale. The balance is expected to be uncollectible. Monty pays for purchases in the month following the purchase. Cash disbursements for expenses other than merchandise purchases are expected to be $14,400 for May. Monty's cash balance at May I was $22,000. Required: a. Compute the expected cash collections during May. b. Compute the expected cash balance at May 31