The president of the retailer Prime Products has just approached the company's bank with a request for a $63,000, 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 $42.000. Accounts receivable on April 1 will total $168,000, of which $144,000 will be collected during April and $19.200 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 three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April May June $ 286,000 $ 664,000 $ 315,000 $ 219,000 $ 248,500 $ 161,500 $ 32,800 $ 32,800 $ 22,400 $ 41,000 $ 41,000 $ 41,000 $ 68, 600 $ 68, 600 $ 52,800 $ 64,000 $ 34,000 $ 34,000 $ 34,000 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 $161,000. d. In preparing the cash budget, assume that the $63,000 loan will be made in April and repaid in June. Interest on the loan will total $980. 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 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 31,400 June Quarter 61,000 $ 42.000 $ $ 390,000 515,780 576,780 1,135.580 1,177.580 421,400 Prime Products Cash Budget April Beginning cash balance $ 42.000 Add receipts: Collections from customers 229,800 Total cash available 271,800 Less cash disbursements: Merchandise purchases 161.000 Payroll 32.800 Lease payments 41.000 Advertising 68.800 Equipment purchases Total cash disbursements 303.400 Excess (deficiency) of cash available over disbursements (31.600) Financing Borrowings Repayments Interest 218,000 32,800 41,000 68,600 248,500 22,400 41,000 52,800 64,000 428,700 148,080 0 360,400 61,000 1,177.580 0 0 0 Total financing Ending cash balance S (31,600) $ 61,000 $ 148,080 $ 1,177.580