Mynor Corporation manufactures and sells beauty products and it is in the stage of approaching the third quarter of the financial year, in which the sales reaches its peak. The following information is related to its operation.

1. At the beginning of July, the company is expected to have a cash balance of $ 43,000.
2. The sales of the corporation is shown in the below Table (all sales are on credit)

May (Actual)

$360,000

June (Actual)

$ 280,000

July (Projected)

$ 350,000

August (Projected)

$ 420,000

September (Projected) $ 360,000

1. Sales are collected in the following pattern: 25% in the month of the sales are made, and the remaining 60% in the following month, while 12% in the second following month. While the remaining is considered to be uncollected.
2. The following Table show the planned purchases and expenses for July through August July August September

Planned purchases $170,000 $ 155,000 $ 165,000

Salaries and wages $ 70,000 $ 70,000 $ 70,000

Advertisement

$ 80,000 $ 80,000 $ 80,000

Rents

$30,000 $30,000 $30,000

Depreciation

$ 40,000 $ 40,000 $ 40,000

1. The payment of purchases is planned to be in the following month of purchases, and the outstanding amount for the purchases at the end of June, which will be paid in July is $160,000
2. Equipment with amount of $ 250,000 is planned to be purchased during the July and the payment will be arranged in the same month. Required

1. Prepare cash collection schedule for the month of July, August and September and the total for the three months.
2. Based on Cash preparation for the month of July, do you think that corporation has enough cash to meeting the liquidity needs of the following months? Explain. What is the strategy that should be done to find the solution?
3. The company may borrow the funds from local banks if the needs are not met at the ends of each month. The funds borrowed will be paid in the next month with amount of $3,000 of interest to be paid with the principal amount.

Based on the previous information, prepare cash budget for July through August and the total for the three months

d. Compute contribution margin and breakeven point in dollar amount for the month of July.

e. If the company is aimed to increase its sale to achieve a minimum profit with $ 50,000, by how much should the sales increase to attain the targeted profit.