a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: b. Actual sales for December and budgeted sales for the next four months are as follows: c. Sales are 20% for cash and 80% on credit. All payments on credit sale. are collected in the month following sale. The accounts recelvable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $16,000 per month: advertising, $56,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,260 for the quarter. 1. Each month's ending inventory should equal 25% of the following month's cost of goods sold. 9 One.half of a month's irventory purchases is paid for in the month of purchase; the other haif is paid in the following month. h. During February, the company will purchase a new copy machine for $1,100 cash. During March, other equipment will be purchased for cash at a cost of $70,500 4. Duning January, the company will declare and pay $45,000 in cash dividends. 1. Manegement wants to maintain a minimum cash bolonce of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these foans is 18 per month. and for simplicity wo will assume that interest is not compounded. The company would, as far as it is able, repoy the loan plus accumulated interest ot the end of the quarter. Required: Using the data above, complete the following statements and schedules for the first quarter: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Complete the Schedule of expected cash collections: Schedule of expected cash collections: -a. Merchandise purchases budget: -b. Schedule of expected cash disbursements for merchandise purchases: 3ash budget: 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Complete the merchandise purchases budget: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Complete the schedule of expected cash disbursements for merchandise purchases. Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign Prenare an absorption costing income statement for the quarter ending March 31