c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase, the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales, rent, $4,100 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $765 per month (includes depreciation on new assets). g. Equipment costing $3,300 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. 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, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: Using the preceding data: 1. Complete the schedule of expected cash collections 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget. 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Quarter Schedule of Expected Cash Collections April May June Cash sales $ 50,400 Credit sales 27,200 Total collections $ 77,600 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 53 Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold $ 63,000 $66,750 Add desired ending merchandise inventory 53,400 Total needs 116,400 Less beginning merchandise inventory 50,400 Required purchases Budgeted cost of goods sold for April = $84,000 sales ~ 75% = $63,000 Add desired ending inventory for April = $66,750 80% = $53,400 Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 30,300 $ 30,300 April purchases 33,000 33,000 66,000 May purchases June purchases Total disbursements