Tomlinson Retail seeks your assistance in developing cash and other budget information for May, June, and July. The store expects to have the following balances at the end of April:

Cash	$ 100,900
Accounts receivable	881,000
Inventories	590,400
Accounts payable	276,736

The firm follows these guidelines in preparing its budgets:

Sales. All sales are on credit with terms of 3/10, n/30. Tomlinson bills customers on the last day of each month. The firm books receivables at gross amounts and collects 60% of the billings within the discount period, 25% by the end of the month, and 9% by the end of the second month. The firms experience suggests that 6% is likely to be uncollectible and is written off at the end of the third month.

Purchases and expenses. All purchases and expenses are on open account. The firm pays its payables over a 2-month period with 54% paid in the month of purchase. Each months units of ending inventory should equal 120% of the next months cost of sales. The cost of each unit of inventory is $40. Selling, general, and administrative (SG&A) expenses, of which $1,300 is depreciation, equal 15% of the current months sales.

Actual and projected sales follow:

Month	Dollars	Units	Month	Dollars	Units
March	$ 732,000	12,200	June	$ 708,000	11,800
April	750,000	12,500	July	744,000	12,400
May	738,000	12,300	August	756,000	12,600

Required:

1. Prepare schedules showing budgeted merchandise purchases for May and June.

2. Prepare a schedule showing budgeted cash disbursements during June.

3. Prepare a schedule showing budgeted cash collections during May.

4. Determine gross and net balances of accounts receivable on May 31.