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Aztec Company sells its product for $150 per unit. Its actual and budgeted sales follow. May (Actual) June (Budget) July (Budget) August (Budget) Sales units 2,200 5,000 4,000 3,580 Sales dollars $ 330,000 $750,000 $ 600,000 $ 525,000 All sales are on credit. Collections are as follows: 22% is collected in the month of the sale, and the remaining 78% is collected in the month following the sale. Merchandise purchases cost $110 per unit. For those purchases, 60% is paid in the month of purchase and the other 40% is paid in the month following purchase. The company has a policy to maintain an ending monthly inventory of 19% of the next month's unit sales, The May 31 actual inventory level of 950 units is consistent with this policy. Selling and administrative expenses of $111.000 per month are paid in cash. The company's minimum cash balance at month-end is $120,000. Loans are obtained at the end of any month when the preliminary cash balance is below $120.000. Any preliminary cash balance above $120,000 is used to repay toans at month-end. This loan has a 1.5% monthly interest rate. On May 31 the loan balance is $35,500, and the company's cash balance is $120,000 Required: 1. Prepare a schedule of cash receipts from sales for each of the months of June and July 2. Prepare the merchandise purchases budget for June and July! 3. Prepare a schedule of cash payments for merchandise purchases for June and July. Assume May's budgeted merchandise purchases is $300,520 4. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month Prepare a schedule of cash receipts from sales for each of the months of June and July. June AZTEC COMPANY Schedule of Cash Receipts from Sales May Sales $ 330,000 $ Cash receipts from: Collections of current period sales Collections of prior period sales Total cash receipts $ July 600,000 750,000 $ + 0 $ 0

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