QUESTION 14 Propestelle, Inc. has budgeted sales revenues as follows Credit sales Cash sales Total sales June $135,000 90.000 $225,000 $125,000 255.000 $380.000 August $ 90,000 195.000 $285.000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are: June $300,000 July 240,000 August 105,000 Other cash disbursements budgeted: (a) selling and administrative expenses of 558,000 each month. (b) dividends of $125,000 will be paid in July, and (c) purchase of equipment in August for $45,000 cash. The company wishes to maintain a minimum cash balance of $65,000 at the end of each month. The company borrows money from the bank at 7.75% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $70,000. Assume that borrowed money in this case is for one month Instructions: Present the analysis in a table. If a table is not used, use the space bar, NOT the tab key, for spacing. 1. Prepare a cash budget for the month of July only. Prepare separate schedule for expected collections from cash sales and credit customers. Also prepare a schedule of expected payments for purchases of inventory 2. For the month of August, prepare a separate schedule for expected collections from cash sales and credit customers