Term Assignment #20 2 Saved Garden Sales, Inc. sells garden supplies. Management is planning its cash needs for the second quarter. The following Information has been assembled to assist in preparing a cash budget for the quarter. a. Budgeted monthly Income statements for April to July are as follows: 30 Sales points Cost of goods sold April $490,000 342,000 Gross margin 148,000 May June $730,000 $410,000 510,000 287,000 220,000 123,000 July $330,000 231,000 99,000 Less: Operating expenses: Selling expense 65,200 98,000 50,600 41,800 Administrative expense 37,000 Total operating expenses 102,200 41,900 139,900 33,800 84,400 31,400 73,200 Net income $ 45,800 $ 80,100 $ 38,600 $ 25,800 "Includes $20,000 in depreciation each month. b. Sales are 20% for cash and 80% on account. c. Sales on account are collected over a three-month period in the following ratio: 10% collected in the month of sale, 70% collected in the first month following the month of sale, and the remaining 20% collected in the second month following the month of sale. February's sales totalled $170,000, and March's sales totalled $250,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's Inventory purchases are paid for in the month of purchase. The remaining 50% are paid in the following month. Accounts payable at March 31 for Inventory purchases during March total $102.000. e. At the end of each month, Inventory must be on hand equal to 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 is $68,400 f. Dividends of $39,900 will be declared and paid in April. g Equipment costing $13,300 will be purchased for cash in May. The cash balance at March 31 is $42,600; the company must maintain a cash balance of at least $30,000 at all times. The company can borrow from its bank, as needed, to bolster the cash account. Borrowings and repayments must be in multiples of $500 Interest is due only when principal is repaid and is calculated on the amount of repayment for the duration of the time money was borrowed. All borrowings take place at the beginning of a month, and all repayments are made at the end of a month. The annual Interest rate is 12%. Compute Interest on whole months (1/12, 212, and so forth). Required: 1. Pronare tek