The president of the retailer Prime Products has just approached the company's bank with a request for a $53,000, 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 3. On April 1, the start of the loan period, the cash balance will be $35.400 Accounts receivable on April will total $154.000, of which $132.000 will be collected during April and $17600 will be collected during May. The remainder will be uncollectible b. Post 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 sele. The other 2% is bad debts that are never collected Budgeted sales and expenses for the three- month period follow Sales (11 on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April May June $ 105,000 $642,000 5 339,000 3 251,000 5 231,000 $100,000 $ 32,600 $ 32,600 520,700 $ 24,500 $ 24,500 $ 24,500 $ 62,000 $ 62,000 5 73,880 $ 29,500 $ 25,00 $ 26,000 $25,800 c. Merchandise purchases are pold in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April total 5169,000 din preparing the cash budget, ossume that the $53,000 loan will be made in April and repaid in June. Interest on the loan will total 5680 Required 1 Coculate the expected cash collections for Apr 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 P 2 Huverus 1115 Equipment purchases Depreciation UL, UN UL, UU 12,00 79,500 $ 26,800 $ 26,800 $ 26,800 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for mer March, which will be paid in April, total $169,000. d. In preparing the cash budget, assume that the $53,000 loan will be made in April and repaid in June. In $880 Required: 1. 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. Required 1 Required 2 Calculate the expected cash collections for April, May, and June, and for the three months in total. Schedule of Expected Cash Collections April May June Quarter Total cash collections Required 2 > Required 1 Required 2 Prepare a cash budget, by month and in total, for the three month period. (Cash deficiency, repayments and interest should be indicated by a minus sign.) May June Quarter Prime Products Cash Budget April Beginning cash balance Add teceipts Collections from customers Tot cash available Less cash disbursements Merchandise purchases Payroll 1 Les payments Advertising Equipment purchases Total cash disbursements Excess deficiency of cash available ser disbursements Emancing towings Tocal rancang Ending cash balance Required