Following is selected information relating to the operations of Kelly Company, a wholesale distributor: Current assets as of March 31: Cash $ 45,000 Accounts receivable 56,000 Inventory 100,800 Plant and equipment, net 243,000 Accounts payable 84,800 Capital shares 330,000 Retained earnings 30,000 ' 6. Gross margin is 25% of sales. b. Actual and budgeted sales data are as follows: March (actual) $140,000 April 168,000 May 180, 000 June 198, 000 July 138, 000 ' 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. At the end of each month, inventory is to be on hand equal to 80% of the following month's sales needs, stated at cost. e. One-half ofa month's 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. f. Monthly expenses are as follows: salaries and wages, 12% of sales; rent, $10,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $2,700 per month (includes depreciation on new assets). . Equipment costing $3,300 will be purchased for cash in April. . The company must maintain a minimum cash balance of $11,000. 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 ofa 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). :TtD Required: Using the preceding data: 1. Prepare a schedule of expected cash collections. -__- Total cash collections 2. Prepare a schedule of inventory purchases and a schedule of expected cash disbursements for purchases. Kelly Company Schedule of Expected Cash Disbursements for Purchases April May June Quarter March purchases April purchases May purchases June purchases Total cash disbursements $ 0 $ 0 $ 0 $ 0 3. Prepare a schedule of expected cash disbursements for operating expenses. Kelly Company Schedule of Expected Cash Disbursements for Operating Expenses April May June Quarter Total cash disbursements $ 0 $ 0 $ 0 $ 04. Prepare a cash budget by month and for the quarter in total. (Any "Repayments" and "Interest" should be indicated by a minus sign.) Kelly Company Cash Budget April May June Quarter Total cash available 0 0 0 0 Deduct: Disbursements: Total disbursements 0 0 0 0 Excess (deficiency) of cash Financing: Total financing 0 0 0 05. Prepare an income statement for the quarter ended June 30. Deduct: Cost of goods sold: Goods available for sale Deduct: Operating expenses: _- 6. Prepare a balance sheet as of June 30. Kelly Company Balance Sheet As of June 30 Assets Current assets: Total current assets 0 Total assets 0 Liabilities and Shareholders' Equity Current liabilities: Shareholders' equity: Total shareholders' equity 0