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

Current assets as of March $31$:

Cash $ $38,000$

Accounts receivable $50,000$

Inventory $90,000$

Plant and equipment, net $223,000$

Accounts payable $74,000$

Capital shares $300,000$

Retained earnings $27,000$

Gross margin is $25\%$ of sales.

Actual and budgeted sales data are as follows:

March $($actual$)$ $ $125,000$

April $150,000$

May $162,000$

June $180,000$

July $123,000$

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.

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$.$

One$-$half of a 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.

Monthly expenses are as follows: salaries and wages, $12\%$ of sales; rent, $$8,500$ per month; other expenses $($excluding depreciation$),6\%$ of sales. Assume that these expenses are paid monthly. Depreciation is $$2,400$ per month $($includes depreciation on new assets$).$

Equipment costing $$3,000$ will be purchased for cash in April.

The company must maintain a minimum cash balance of $$10,000.$ An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month; borrowing must be in multiples of $$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 $30.$