Aztec Company sells its product for $160 per unit. Its actualand budgeted sales follow.

	Units	Dollars
April (actual)	4,000	$	640,000
May (actual)	2,000		320,000
June (budgeted)	4,500		720,000
July (budgeted)	3,500		719,000
August (budgeted)	4,100		656,000

All sales are on credit. Recent experience shows that 26% of creditsales is collected in the month of the sale, 44% in the month afterthe sale, 29% in the second month after the sale, and 1% proves tobe uncollectible. The product’s purchase price is $110 per unit.60% of purchases made in a month is paid in that month and theother 40% is paid in the next month. The company has a policy tomaintain an ending monthly inventory of 23% of the next month’sunit sales plus a safety stock of 100 units. The April 30 and May31 actual inventory levels are consistent with this policy. Sellingand administrative expenses for the year are $1,728,000 and arepaid evenly throughout the year in cash. The company’s minimum cashbalance at month-end is $110,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$110,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 14%interest rate. On May 31, the loan balance is $47,000, and thecompany’s cash balance is $110,000.

Required:
1. Prepare a schedule that shows the computationof cash collections of its credit sales (accounts receivable) ineach of the months of June and July.
2. Prepare a schedule that shows the computationof budgeted ending inventories (in units) for April, May, June, andJuly.
3. Prepare the merchandise purchases budget forMay, June, and July. Report calculations in units and then show thedollar amount of purchases for each month.
4. Prepare a schedule showing the computation ofcash payments for product purchases for June and July.
5. Prepare a cash budget for June and July,including any loan activity and interest expense. Compute the loanbalance at the end of each month.