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4. Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a) As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Particulars Debits Credits Cash $ 48,000 Accounts receivable 224,000 Inventory 60,000 Buildings and equipment (net) 370,000 Accounts payable $ 93,000 Common stock 500,000 Retained earnings 109,000 Total $702,000 $702,000 b) Actual sales for December and budgeted sales for the next four months are as follows: December (actual) $280,000 January $400,000 February $600,000 March $300,000 April $200,000 c) Sales are 25% for cash and 75% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable on December 31 are a result of December credit sales. d) The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e) Each month's ending inventory should equal 20% of the following month's cost of goods sold. f) 60% of a month's inventory purchases is paid for in the month of purchase; the remaining 40% is paid in the following month. Required: 1. Prepare a schedule of expected cash collections for January, February, and March and for the quarter in total. (5 Marks) 2. Prepare the following for merchandise inventory: a) A merchandise purchases budget for January, February, and March and for the quarter in total. (3 Marks) b) A schedule of expected cash disbursements for merchandise purchases January, February, and March and for the quarter in total. (2 Marks)