Sweeny Co. is preparing a cash budget for the second quarter of the coming year. The following data have been foretasted:

April May

Sales $150,000 $157,500

Merchandise purchases 107,000 112,400

Operating expenses:

Payroll 13,600 14,280

Advertising 5,400 5,700

Rent 1,500 1,500

Depreciation 7,500 7,500

End of April balances:

Cash 40,000

Bank loan payable 16,000

Additional data:

(1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000.

(2) Purchases are all on credit, with 40% paid in the month of purchase and the balance paid in the following month.

(3) Operating expenses are paid in the month they are incurred.

(4) A minimum cash balance of $40,000 is required at the end of each month.

(5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available.

Question: Prepare the company's cash budget for May. Show the ending loan balance at May 31.