Raelynn is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow.

Budgeted	July	August	September
Sales	69,250	85,400	54,750
Cash payments for merchandise	42,950	39,300	33,600

Sales are 20% cash and 80% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash; $45,000 in accounts receivable; $4,500 in accounts payable; and a $5,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If any excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,000 per month), and rent ($6,500 per month).

Use the information provided above to prepare a cash budget, and any necessary supplemental schedules. Then use the information above, your budget and your supplemental schedules to answer the following questions.

1. How much cash is expected to be collected in July?

2. How much cash is expected to be collected in August?

3. How much cash is expected to be paid out in July?

4. How much cash is expected to be paid out in September?

5. How much interest is expected to be paid out in August?

6. What is the ending cash balance at the end of July?

7. What is the ending cash balance at the end of September?

8. How much of the loan can be paid back at the end of August?