Please do last 2 parts only.
Extracted text: Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. Schedule of Expected Cash Collections May Uune Quarter Cash sales Sales on account: February March April May June Total cash collections Required 2A
Extracted text: Problem 8-24 (Algo) Cash Budget with Supporting Schedules (LO8-2, LO8-4, LO8-8] Garden Sales, Ic., sells garden supplies. Management Is planning Its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following Information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing Income statements for April-July are: April $ 650, 008 $ 820,000 455, eee 195,e08 July $ 530,800 $ 430, eee 301,000 May June Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expense Administrative expense" Total selling and administrative expenses 574,000 371,800 246,000 159,000 129, 000 83,e00 46, se8 102, 800 64, 800 43, 00e 62,489 164, 480 $ 65, 500 $ 81,600 S 39,200 193, 20e 84,000 41,000 129, 500 Net operating income 55,89e s 45,eee "Includes $25,000 of depreclation each month. b. Sales are 20% for cash and 80% on account. C. Sales on account are collected over a three-month period with 10% collected In the month of sale; 70% collected in the first month following the month of sale; and the remalning 20% collected In the second month following the month of sale. February's sales totaled $245,000, and March's sales totaled $260,000. d. Inventory purchases are pald for within 15 days. Therefore, 50% of a month's inventory purchases are pald for In the month of purchase. The remaining 50% Is pald in the following month. Accounts payable at March 31 for Inventory purchases during March total $118,300. e. Each month's ending Inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 Is $91,000. f. DIvidends of $32,000 will be declared and pald In Aprtl. g. Land costing $40,000 will be purchased for cash in May. h. The cash balance at March 31 Is $54,000; the company must malntaln a cash balance of at least $40,000 at the end of each month. I. The company has an agreement with a local bank that allows the company to borrow In Increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000, The Interest rate on these loans is 1% per month and for simplicity we will assume that Interest Is not compounded. The company would, as far as It is able, repay the loan plus accumulated Interest at the end of the quarter. Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter In total. 2 Prepare the following for merchandise Inventory: a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter In total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter.