Q1. Darty Corp, a distributor of bety products is ready to begin its third quarter. The company has requested a $40,000, 90-day loan from its bank to help meet cash requirements during the quarter. Since Darty has experienced difculty in paying off its loans in the past, the bank has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled: a} On July I, the beginning of the third quarter, the company will have a cash balance of $34 500. 11} Actual sales for the last two months and budgeted sales for the third quarter follow: Ma {actual} 32 50,000 Jul (bud- ed) Au st {bud cted) s- . ember (bud - ted] saunas Past experience shows that 25% of a month's sales are collected in the month of sale, 70% in the month following sale, and 3% in the second month following sale. The remainder is uncollcctible. 1:} Budgeted merchandise purchases and budgeted expenses for the third quarter are given below: m- -.I___ Merchandise purchases are paid in full during the month following the purchase. Beginning balanoe of inventory at July 1 was $100,000 and ending balances for July, August and September are expected to be $125,000, $200,000 and $16,000, respectively. Accounts payable for merchandise purchases on June 30, which will be paid during July, total $10000. Rent is paid in advance for six months. All other budgeted expenses are paid in full in the month they are incurred. d} Equipment costing $10,000 will be purchased for cash during July. Old equipment with a book value of $3,000 will be sold for $3,200 in July and the proceeds will be received in August. It} In preparing the cash budget, assume that the $40,000 loan will be received from the bank in July and repaid {principal and interest} in September. Interest on the loan will total $1,200. Reguil'ed: 2} Prepare a schedule of expected cash collections from sales for July, August and September. b} Prepare a cash budget, by month for July, August and September. 1:} If the company needs a minimum cash balanoe of $20,000 to start each month, can the loan be repaid as planned? :1} Prcpare a budgeted prot or Inns Statm-I for each month