The president of the retailer Prime Products has just approached the company's bank with a request for a $30,000, 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 data are available 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 $36,500. Accounts receivable on April 1 will total $176,400, of which $151,000 will be collected during April and $20,800 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% represents bad debts that are never collected. Budgeted sales and expenses for the three-month period follow: April May June 312,000 428,000 319,000 Sales (all on account) 204,000 162,000 178,500 Merchandise purchases 24,000 24,000 18,900 Payroll 24,800 24,800 24,800 Lease payments Advertising 79,200 79,200 74,480 78,000 Equipment purchases 17,200 17,200 17,200 Depreciation C. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid during April, total $160,000 d. In preparing the cash budget, assume that the $30,000 loan will be made in April and repaid in June Interest on the loan will total $1,140