Current assets as of March 31:

Cash

8,000

Accounts receivable

20,000

Inventory

36,000

Building and equipment, net

120,000

Accounts payable

21,750

Capital stock

150,000

Retained earnings

12,250

Gross margin (% of sales)

25%

COGS (% of sales)

75%

March (actual)

50,000

April

60,000

May

72,000

June

90,000

July

48,000

Sales

Cash

60%

Credit - collected in following month

40%

EI % of following Budgeted COGS

80%

% of purchases paid in month of purchase

50%

% of purchases paid in month following purchase

50%

Monthly Expenses

Commissions (% of sales)

12%

Rent per month

2,500

Other expenses (excluding depreciation - % of sales)

6%

Depreciation per month

900

April equipment purchase (cash)

1,500

Minimum Cash Balance

4,000

Borrowing Maximum

20,000

Borrowing Increments

1,000

Interest rate (per month)

Schedule of Expected Cash Collections
	April	May	June	Quarter
Cash sales	$36,000
Credit sales	20,000
Total collections	$ 56,000
Merchandise Purchases Budget
	April	May	June	Quarter
Budgeted cost of goods sold	$45,000	$54,000
Add desired ending inventory	43,200
Total needs	88,200
Less beginning inventory	36,000
Required purchases	$ 52,200
Schedule of Expected Cash DisbursementsMerchandise Purchases
	April	May	June	Quarter
March purchases	$21,750			$21,750
April purchases	26,100	26,100		52,200
May purchases
June purchases
Total disbursements	$ 47,850
Shilow Company
Cash Budget
	April	May	June	Quarter
Beginning cash balance	$8,000	$ 4,350
Add cash collections	56,000
Total cash available	64000
Less cash disbursements:
For inventory	47,850
For expenses	13,300	15,460
For equipment	1,500
Total cash disbursements	62650
Excess (deficiency) of cash	1,350
Financing:
Borrowings	3,000
Repayments
Interest
Total financing	3,000
Ending cash balance	$ 4,350
Shilow Company
Income Statement
For the Quarter Ended June 30
Sales
Cost of goods sold:
Beginning inventory
Purchases
Goods available for sale
Ending inventory
Gross margin
Selling and administrative expenses:
Commissions
Rent
Depreciation
Other expenses
Net operating income
Interest expense
Net income
Shilow Company
Balance Sheet
June 30
Assets
Current assets:
Cash
Account receivable
Inventory
Total current assets
Building and equipment-net
Total assets
Liabilities and Stockholders Equity
Account payable
Stockholders' equity:
Common stock
Retained earnings
Total liabilities and stockholders equity

1%