Business, 21.05.2021 17:50 glowbaby123

Aztec Company sells its product for $160 per unit. Its actualand projected sales follow. Units Dollars April (actual) 5,000$800,000 May (actual) 3,600 576,000 June (budgeted) 7,500 1,200,000July (budgeted) 5,000 800,000 August (budgeted) 4,300 688,000 Allsales are on credit. Recent experience shows that 22% of creditsales is collected in the month of the sale, 48% in the month afterthe sale, 24% in the second month after the sale, and 6% proves tobe uncollectible. The product’s purchase price is $110 per unit. All purchases are payable within 12 days. Thus, 60% of purchasesmade in a month is paid in that month and the other 40% is paid inthe next month. The company has a policy to maintain an endingmonthly inventory of 21% of the next month’s unit sales plus asafety stock of 70 units. The April 30 and May 31 actual inventorylevels are consistent with this policy. Selling and administrativeexpenses for the year are $1,584,000 and are paid evenly throughoutthe year in cash. The company’s minimum cash balance at month-endis $100,000. This minimum is maintained, if necessary, by borrowingcash from the bank. If the balance exceeds $100,000, the companyrepays as much of the loan as it can without going below theminimum. This type of loan carries an annual 11% interest rate. OnMay 31, the loan balance is $41,000, and the company’s cash balanceis $100,000. (Round final answers to the nearest whole dollar.) 1. Prepare a table that shows the computation of cashcollections of its credit sales (accounts receivable) in each ofthe months of June and July.
2. Prepare a table that shows the computation of budgeted endinginventories (in units) for April, May, June, and July.
3. Prepare the merchandise purchases budget for May, June, andJuly. Report calculations in units and then show the dollar amountof purchases for each month.
4. Prepare a table showing the computation of cash payments onproduct purchases for June and July.
5. Prepare a cash budget for June and July, including any loanactivity and interest expense. Compute the loan balance at the endof each month. (Do not round intermediate calculations.)

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Aztec Company sells its product for $160 per unit. Its actualand projected sales follow. Units Dolla...

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