explanations as well please kn how the answers were brought upon
The following data relate to the operations of Shilow 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 $ 9,000 $ 26,000 $ 48,600 $ 109,200 $ 29,175 $ 150,000 $ 13,625 a. The gross margin is 25% of sales b. Actual and budgeted sales data: March (actual) April May June July $ 65,000 $ 81,880 $ 86,000 $ 111,000 $ 62,000 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, $3,800 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $819 per month (includes depreciation on new assets). g. Equipment costing $3,000 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 tatalinan halance nf tonn The Interact rate nn thaen Inane le 14. nar month and Inreinirit we will neema that interact lennt Help 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 April May June Quarter Budgeted cost of goods sold $ 60,750 $ 64,500 Add desired ending merchandise inventory 51,600 Total needs 112,350 Less beginning merchandise inventory 48,600 Required purchases $ 63,750 Budgeted cost of goods sold for April = $81,000 sales * 75% $60,750, Add desired ending inventory for April = $64,500 80% = $51,600 Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 29,175 $ 29,175 April purchases 31,875 31,875 63,750 May purchases June purchases Total disbursements Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) June Quarter Shilaw Company Cash Budget April May $ 9,000 74,600 83,600 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Interest Total financing Ending cash balance 61,050 18,380 3,000 82.430 1,170 PRE Required 1 Required 2 Required 3 Required 4 Required 5 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: >
