Hancock Company, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the second quarter a. As of December 31 (the end of the prior quarter), the companys balance sheet showed the following account balances:

Cash	$10,500
Accounts Receivable	54,000
Inventory	16,800
Buildings and equiptment (net)	132,000
Accounts payable		44,000
Common stock		112,000
Retained earnings		57,3000
	213,300	213,300

b. Actual budgeted sales were as follows:

December (actual)	$90,000
January	120,000
February	200,000
March	67,000
April	256,000

c. Sales are 40% for cash and 60% on credit. All payments on credit sales are collected in the month following the sale. The accounts receivable at December 31 are a result of December credit sales d. The company's gross margin percentage is 30% of sales. (In other words, cost of goods sold is 70% of sales.) e. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. f. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three- quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory. g. Monthly expenses are as follows: commissions, $24,500; rent, $3,850; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $3,750 for the quarter and includes depreciation on new assets acquired during the quarter. h. Equipment will be acquired for cash: $5,030 in January and $9,300 in February. i. Management would like to maintain a minimum cash balance of $3,000 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 total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. 1. Using the data above, compute the following statements and schedules for the second quarter: Schedule of expected cash returns:

	Jan	Feb	March	Quarter total
Cash Sales	48,000
Credit sales	54,000
Total collections	102,000