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The president of the retailer Prime Products has just approached the company's bank with a request for a $71,000,90-day loan. The purpose of the loan

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The president of the retailer Prime Products has just approached the company's bank with a request for a $71,000,90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following clata are avallable for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $43,800. Accounts recelvable on April 1 will total $179,200, of which $153,600 will be collected during April and $20,480 will be collected during May. The remainder will be uncollectible. b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the threemonth period follow: c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $145,500 d. In preparing the cash budget, assume that the $71,000 loan will be made in April and repaid in June. Interest on the loan will total $1.060 Merchandise purchases are paid in full during the month following purchase. Accounts payable for-merchandise purchases during March, which wilt be pald in Aprit, total $145,500 In preparing the cash budget, assume that the $71,000 loan will be made in April and repaid in June. Interest on the loan will total $1,060. Required: . Calculate the expected cash collections for April, May, and June, and for the three months in total. 2. Prepare a cash budget, by month and in total, for the three-month period: Complete this question by entering your answers in the tabs below. Calculate the expected cash collections for April, May, and June, and for the three months in total. Required: Calculate the expected cash collections for April, May, and June, and for the three months in total, 2. Prepare a cash budget, by month and in total, for the three-month period. Complete this question by entering your answers in the tabs below. Prepare a cash budget, by month and in total, for the three-month period. (Cash deficiency, repayments and interest should be ind cated by a minus sign.)

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