ces The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Inventory Building and equipment, net Current assets as of March 31: Cash Accounts receivable Accounts payable Common stock $ 8,500 $ 24,000 $ 45,600 $ 121,200 $ 27,300 $ 150,000 Retained earnings $ 22,000 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) $ 60,000 April $ 76,000 May $ 81,000 June July $ 106,000 $ 57,000 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. 1. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,300 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $909 per month (includes depreciation on new assets) g. Equipment costing $2,500 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. Schedule of Expected Cash Collections April May June Quarter Cash sales $45,600 Credit sales 24,000 25 Total collections $69,600 $ 0 0 $ 0 Required 1 Required 2 > Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Merchandise Purchases Budget Budgeted cost of goods sold April May June Quarter $57,000 $60,750 48,600 Add desired ending merchandise inventory Total needs Less beginning merchandise inventory Required purchases Budgeted cost of goods sold for April Add desired ending inventory for April 105,600 60,750 45,600 $60,000 $60.750 $ $76,000 sales 75% $57,000. $60,750 80% -$48,600 0 0 0 $ 0 Schedule of Expected Cash Disbursements-Merchandise Purchases March purchases April purchases April May June $27,300 30,000 30,000 Quarter $300 60,000 May purchases June purchases Total disbursements $57,300 $30,000 $ 0 $ 87,300 Beginning cash balance Add collections from customers Total cash available d Less cash disbursements: Shilow Company Cash Budget April May June Quarter $ 8,500 69,600 78,100 0 0 For inventory 57,300 For expenses 16,980 For equipment 2,500 ht Total cash disbursements 76,780 0 0 ences Excess (deficiency) of cash 1,320 0 0 0 available over disbursements Financing: Borrowings N Repayments Interest Total financing Ending cash balance 10 0 1,320 $ 0 0 0 0 $ 0 $ 0 Prepare an absorption costing income statement for the quarter ended June 30. Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Selling and administrative expenses: 0 0 0 0 Prey 2 of 3 Next Current assets: Total current assets Shilow Company Balance Sheet June 30 Assets 0 Total assets $ 0 Liabilities and Stockholders' Equity Stockholders' equity: Mayt