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 $36,000 Accounts receivable on April 1 will total $197,650, of which $166,500 will be collected during April and $23,800 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: May Apr June 232,000 Sales (all on account) $476,000 $296,000 188,000 Merchandise purchases$ $163,500 $135,500 $22,800 22,800 26,900 Payroll Lease payments $31,400 31,400 400 $63,600 63,600 41,680 Advertising Equipment purchases 102,000 Depreciation $17,800 17,800 17,800 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 $162,500. 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 $1,280. Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the three months in total. Prime Produc Schedule of Expected Cash Collections April May une Quarter From accounts receivable From April sales 0 From May sales 0 From June sales Total cash collections