Styles Dana MacKay, controller for Gulf Coast Retailers, has assembled the following data to assist in the preparation of a cash budget for the third quarter of the year: a. Sales: May (actual) $100,000 June (actual) $120,000 July (estimated) $ 90,000 August (estimated) $100,000 September (estimated) $135,000 October (estimated) $110,000 b. Each month, 30% of sales are for cash and 70% are on credit. The collection pattern for credit sales is 20% in the month of sale, 50% in the following month, and 30% in the second month following the sale. c. Each month, the ending inventory exactly equals 50% of the cost of next month's sales. The gross margin percentage is 20%. d. Inventory purchases are paid for in the month following the purchase. e. Recurring monthly expenses are as follows: Salaries and wages Depreciation on PPE Utilities $5,000 $4,000 $1,000 f. Property taxes of $900 are due and payable on July 15 A. 8. Advertising fees of $600 is incurred in July and must be paid on August 20. h. The company has a policy to maintain a minimum cash balance of $30,000. If necessary, it will borrow to meet its short-term needs. All borrowing is done at the beginning of the month. All payments on principal and interest are made at the end of a month. The annual interest rate is 9%. The company must borrow in multiples of $1,000. i. A partially completed balance sheet as of June 30 follows. (Note: Accounts payable is for inventory purchases only.) Cash A/R Inventory PPE, net A/P Common Stock Retained Earnings $13,550 $88,200 $36,000 $425,000 $84,000 $210,000 $268,750 supporting schedule of cash Required: 1. Prepare a cash budget for the month of July. Prepare collections. 2. Prepare and Income Statement for the month of July. 3. Prepare a budgeted balance sheet as of July 31. Styles Dana MacKay, controller for Gulf Coast Retailers, has assembled the following data to assist in the preparation of a cash budget for the third quarter of the year: a. Sales: May (actual) $100,000 June (actual) $120,000 July (estimated) $ 90,000 August (estimated) $100,000 September (estimated) $135,000 October (estimated) $110,000 b. Each month, 30% of sales are for cash and 70% are on credit. The collection pattern for credit sales is 20% in the month of sale, 50% in the following month, and 30% in the second month following the sale. c. Each month, the ending inventory exactly equals 50% of the cost of next month's sales. The gross margin percentage is 20%. d. Inventory purchases are paid for in the month following the purchase. e. Recurring monthly expenses are as follows: Salaries and wages Depreciation on PPE Utilities $5,000 $4,000 $1,000 f. Property taxes of $900 are due and payable on July 15 A. 8. Advertising fees of $600 is incurred in July and must be paid on August 20. h. The company has a policy to maintain a minimum cash balance of $30,000. If necessary, it will borrow to meet its short-term needs. All borrowing is done at the beginning of the month. All payments on principal and interest are made at the end of a month. The annual interest rate is 9%. The company must borrow in multiples of $1,000. i. A partially completed balance sheet as of June 30 follows. (Note: Accounts payable is for inventory purchases only.) Cash A/R Inventory PPE, net A/P Common Stock Retained Earnings $13,550 $88,200 $36,000 $425,000 $84,000 $210,000 $268,750 supporting schedule of cash Required: 1. Prepare a cash budget for the month of July. Prepare collections. 2. Prepare and Income Statement for the month of July. 3. Prepare a budgeted balance sheet as of July 31