Following is selected information relating to the operations of Kelly Company, a wholesale distributor:

Current assets as of March 31:
Cash	$	9,000
Accounts receivable		22,000
Inventory		39,600
Plant and equipment, net		126,000
Accounts payable		23,600
Capital shares		160,000
Retained earnings		13,000

1. Gross margin is 25% of sales.
2. Actual and budgeted sales data are as follows:

March (actual)	$	55,000
April		66,000
May		78,000
June		96,000
July		53,000

1. 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.
2. At the end of each month, inventory is to be on hand equal to 80% of the following months sales needs, stated at cost.
3. One-half of a months inventory purchases are paid for in the month of purchase; the other half are paid for in the following month. The accounts payable at March 31 are a result of March purchases of inventory.
4. Monthly expenses are as follows: salaries and wages, 12% of sales; rent, $3,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $1,000 per month (includes depreciation on new assets).
5. Equipment costing $1,600 will be purchased for cash in April.
6. The company must maintain a minimum cash balance of $5,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month; borrowing must be in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of repayment of principal; figure interest on whole months (1/12, 2/12, and so forth).

Required: Using the preceding data: 1. Prepare a schedule of expected cash collections.

2. Prepare a schedule of inventory purchases and a schedule of expected cash disbursements for purchases.

3. Prepare a schedule of expected cash disbursements for operating expenses.

4. Prepare a cash budget by month and for the quarter in total. (Any "Repayments" and "Interest" should be indicated by a minus sign.)

5. Prepare an income statement for the quarter ended June 30.

6. Prepare a balance sheet as of June 30.