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Required 1 Required 2 Calculate the expected cash collections for April, May, and June, and for the three months in total April Quarter May June Total cash collections Required 1 Required 2

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.) Prime Products Cash Budget April May June Quarter Beginning cash balance Add receipts Collections from customers Total cash available Less cash disbursements Merchandise purchases Payroll Lease payments Advertising Equipment purchases Total cash disbursements Excess (deficiency) of cash available over disbursements inancing Borrowings Repayments Interest Total financing nding cash balanceThe president of the retailer Prime Products has just approached the companys bank with a request for a $61,000, 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 $42,500. Accounts receivable on April 1 will total $165,200, of which $141,600 will be collected during April and $18,880 will be collected during May. The remainder will be uncollectible b. Past experience shows that 30% of a months 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: April ay June Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation $ 304,000 532,000 275,000 $ 232,000 201,500 138,000 $ 27,600 27,600 22,000 $ 41,200 41,200 $41,200 $ 60,200 $60,200 60,280 $ 82,000 $ 33,000 33,000 33,000 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 $150,500 d. In preparing the cash budget, assume that the $61,000 loan will be made in April and repaid in June Interest on the loan will total $960 Required: . 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

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Cash budget includes the cash inflows and the cash out flows during the period. Add all the cash inflows to the cash in hand at the begining of the period, and then deduct all the cash out flows.As per the additional information, record 30% of sales in the current month, 60% in the following month and 8% in the second following month.

Schedule of expected cash collections April 141600 91200 May 18880 182400 Quarter 160480 297920 59600 319200478800 82500 June From accounts receivable From April sales From May sales From June sales Total cash collections 24320 82500 232800 360880426020 1019700 Prime products Cash budget April 42500 May 56800 June 56680 Quarter 42500 Beginning cash balance Add receipts 232800 360880 426020 1019700 275300 417680 482700 1175680 Collection from customers Total cash available Less cash disbursements Merchandise purchases Pavroll Lease payments Advertisin Equipment purchases 150500 232000 201500 584000 77200 123600 180680 82000 279500 361000 406980 1047480 5720 128200 27600 41200 60200 27600 41200 60200 22000 41200 60280 82000 Total cash disbursements Excess (deficiency) of cash available over disbursements Financin 4200 56680 7 61000 -61000 -960 -960 5680056680 1376013760 61000 Borrowings Repayments Interest -61000 -960 -61960 61000 Total financin Ending cash balance

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