VROOM Inc. is a merchandiser that sells spa products to the hotel industry. (the company is not a manufacturer). Management is planning its cash needs for the second quarter April, May and June). The following information has been assembled to assist in preparing a cash budget for the second quarter: 1. Budgeted monthly income statements for April to July are as follows: Sale.000 300.00 April May June July Sales $470,000 $710,000 $410,000 $300,000 Cost of goods sold 336,000 504,000 280,000 220,000 Gross margin 134,000 206,000 130,000 80,000 Less: Operating expenses: Selling expense 53,200 96,000 49,600 40,800 Administrative expense 46,000 41,600 32,800 30,400 Total operating expenses 99,200 137,600 82,400 71,200 Net income $ 34,800 $68,400 $ 47,600 $ 8,800 2. Sales are 15% for cash and 85% on account. 3. Sales on account are collected over a three-month period in the following pattern: 20% collected in the month of sale, 70% collected in the month following the sale, and the remaining 10% is collected in the second month following the sale. February sales totalled $160,000, and March sales totalled $300,000. 4. Inventory purchases are paid 50% in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $150,000.- 5. At the end of each month, inventory must be on hand equal to 15% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $67,200. (HINT: the desired ending inventory for April is 15% x $504,000) 6. Dividends of $90,000 will be declared and paid in April.. 7. Land will be sold for $25,000 cash in May. 8. Selling and administrative expenses are paid when incurred. Administrative expenses include $25,000 of depreciation. 9. The cash balance at March 31 is $130,600 Required: 1. Prepare a schedule of expected cash collections from sales for each of the months April, May, and June. 2. Prepare the following for merchandise inventory: 1. An inventory purchases budget for each of the months April, May, and June. 2. A schedule of expected cash disbursements for inventory for each of the months April, May, and June. 3. Prepare a cash budget for the second quarter by month (April, May and June)