Chack my work 10 points 1 Skipped References The following data relate to the operations of Shllow Company, a wholesale distributor of consumer goods: Current assets as of March 31 Cash Accounts receivable Inventory. Building and equipment, net Accounts payable Common stock Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 45,000 $ 61,000 $66,000 $91,000 $ 42,000 $ 7,000 $ 18,000 $ 16,600 121,200 $ 21,675 $ 150,000 $ 11,125 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, $1,800 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 $1,000 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 Mc Graw Hill Prev 1 of 1 Next > 15 Skipped "wences total loan balance of $20,000. The interest rate on these loans is 1% per month and fodsimplicity 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 $ 36,600 May Cash sales Credit sales Total collections 18,000 $ 54,600 June Quarter 1 Required 1 Required 2 Required 3 Required 4 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Merchandise Purchases Budget pints Skipped References Budgeted cost of goods sold Add desired ending merchandise inventory Total needs Less beginning merchandise inventory Required purchases April May June Quarter $ 45,750 $ 49,500 39,600 85,350 36,600 $ 48,750 Budgeted cost of goods sold for April = $61,000 sales x 75% = $45,750. Add desired ending inventory for April = $49,500 x 80% = $39,600. Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 21,675 $ April purchases 24,375 24,375 21,675 48,750 May purchases June purchases Total disbursements 1 ts Skipped ferences Shilow Company Cash Budget April May June Quarter $ 7,000 54,600 61,600 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses 46,050 12.780 For equipment 1,000 Total cash disbursements 59,830 Excess (deficiency) of cash available over disbursements 1,770 Financing: Borrowings Repayments Interest Total financing Ending cash balance < Required 2 Required 4 > 10 10 1 points Skipped References Current assets: Total current assets Shilow Company Balance Sheet June 30 Assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity