Following is selected information relating to the operations of Shilow Company, a wholesale distributor Current assets as of March 31 Cash Accounts receivable Inventory Plant and equipment, net Accounts payable Capital shares Retained earnings $ 48,000 58,000 104,400 249,000 88,400 340,000 31,000 a. Gross margin is 25% of sales b. Actual and budgeted sales data are as follows March (actual) $145,000 174,000 186,000 204,000 143,000 ril June July a. Gross margin is 25% of sales b. Actual and budgeted sales data are as follows $145,000 174,000 186,000 204,000 143,000 March (actual) ril May June July C. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The d. At the end of each month, inventory is to be on hand equal to 80% of the following month's sales needs e. One-half of a month's inventory purchases are paid for in the month of purchase; the other half are paid accounts receivable at March 31 are a result of March credit sales stated at cost. 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, $10,500 per month. other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly Depreciation is $2,800 per month (includes depreciation on new assets). g. Equipment costing $3,400 will be purchased for cash in April. h. The company must maintain a minimum cash balance of $12,000. 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. SHILOW COMPANY Schedule of Expected Cash Collections April May June Quarter Cash sales Credit sales Total cash collections 2. Prepare a schedule of inventory purchases and a schedule of expected cash disbursements for purchases SHILOW COMPANY Schedule of Inventory Purchases April May June Quarter Total needs SHILOW COMPANY Schedule of Expected Cash Disbursements for Purchases April May June Quarter March purchases April purchases May purchases June purchases Total cash disbursements 3. Prepare a schedule of expected cash disbursements for operating expenses. SHILOW COMPANY Schedule of Expected Cash Disbursements for Operating Expenses April May June Quarter Total cash disbursements 4. Prepare a cash budget by month and for the quarter in total. (Any "Repayments" and "Interest" should be indicated by a minus sign.) SHILOW COMPANY Cash Budget April May June Quarter Total cash available Deduct: Disbursements Total disbursements Excess (deficiency) of cash Financing Total financing 5. Prepare an income statement for the quarter ended June 30 SHILOW COMPANY 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 SHILOW COMPANY Balance Sheet as of June 30 Assets Current assets: Total current assets Total assets Liabilities and Shareholders' Equity Current liabilities: Stockholders' equity Total shareholders' equity Total liabilities and shareholders' equity