Check The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods Current assets as of March 311 Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 7,500 $ 20,000 $ 39,600 $ 127,209 $ 23,550 $ 150,00 $ 20,750 a. The gross margin is 25% of sales b. Actual and budgeted sales data: March (actual) April May June 550.000 $ 66,000 $ 71,000 $ 96,000 $ 47,000 July 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 Monthly expenses are as follows commissions, 12% of sales rent. $2,300 per month other expenses (excluding depreciation), 6% of sales Assume that these expenses are paid monthly. Depreciation is $954 per month (includes depreciation on new assets). 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 Monthly expenses are as follows: commissions, 12% of sales rent, $2,300 per month other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $954 per month (includes depreciation on new assets) g Equipment costing $1,500 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 focal 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 Uune 30 5. Prepare a balance sheet as of June 30 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 Cash sales Credit sales Total collections Schedule of Expected Cash Collections April May June $ 39.600 20.000 S 59,600s 015 0 S D 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 merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. June Quarter Merchandise Purchases Budget April May Budgeted cost of goods sold 49,500 5 53,250 Add desired ending merchandise Inventory 42.600 Total needs 92.100 53 250 Less beginning merchandise inventory 39,600 Required purchases $ 52500 $ 53,250 $ 0 0 05 0 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) June Quarter 0 0 Shilow Company Cash Budget April May Beginning cash balance $ 7,500 Add collections from customers 59,600 Total cash available 67.100 Less cash disbursements For inventory 49,800 For expenses 14,180 For equipment 1,500 Total cash disbursements 65,480 Excess (deficiency) of cash available over disbursements 1,620 Financing Borrowings Repayments Interest Total financing 0 $ Ending cash balance 1.620 5 0 0 0 0 0 0 0 0 0 $ 0 $ 0 Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: 0 0 0 0 Selling and administrative expenses. 0 0 0 Dalance sneeu June 30 Assets Current assets: Total current assets 0 $ 0 Total assets Liabilities and Stockholders' Equity Stockholders' equity 0 $ 0 Total liabilities and stockholders equity