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 med the stand end or me gnor Guater, the company's gener a. As of December 31(the end of the prior quarter), the company's general ledger showed the following account balances Debits Credits 56.000 12,800 E Cash hccounts receivable Inventory Buildings and equipment (net) Accounts payable Cominon stook Retained earnings 366. 60. 150 EEEE 366.000 $ 89,925 500.000 105,025 $694.95 694, 950 es b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February $266,000 $401.000 $598.000 $313,000 $209,000 Tarch April c Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at 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. Monthly expenses are budgeted as follows: salaries and wages, $31.000 per month advertising. $65.000 per month shipping 5% of sales other expenses. 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,660 for the quarter 1. Each month's ending Inventory should equal 25% of the following month's cost of goods sold. One-half of a month's Inventory purchases is paid for in the month of purchase: the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,600 cash. During March, other equipment will be purchased for cash at a cost of $78,000 L. During January, the company will declare and pay $45,000 in cash dividends. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local that allows the company to borrow in increments of $1,000 at the beginning of each month. The Interest rate on these Joong is 1% per month and for simplicity we will assume that interest is not compounded. The company would as far as is able, repay the loon plus accumulated interest at the end of the quarter. Required: Using the data above, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections 2-a Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: Check my my February March April 3401. $590.000 $313.000 $209,000 C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The occounts receivable at 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. Monthly expenses are budgeted as follows: Salaries and wages, $31.000 per month advertising. $65.000 per month shipping. 5% of sales: other expenses. 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter will be $44.660 for the quarter f. Each month's ending Inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's Inventory purchases is paid for in the month of purchase, the other half is paid in the following month h. During February, the company will purchase a new copy machine for $2.500 cash During March, other equipment will be purchased for cash at a cost of $78,000 1. During January, the company will declare and pay $45.000 in cash dividends Management wants to maintain a minimum cash balance of $30,000 The company has an agreement with a local bank that wlows the company to borrow in increments of $1000 at the beginning of each month. The interest rate on these Toans 18 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it Isable, repay the loan plus accumulated interest at the end of the quarter Required: Using the data above, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-6 Schedule of expected cash disbursements for merchandise purchases 3. Cosh budget 4. Prepare an absorption costing income statement for the quarter ending March 31 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Req1 Req 2AReg 2B Req3Req 4 Reg 5 Complete the Schedule of expected cash collections: Schedule of Expected Cash Collections January February March Quarter Cash sales 80 200 Creditles 212,800 Total collections 293.000 Reg 2 > Check my my February March April 3401. $590.000 $313.000 $209,000 C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The occounts receivable at 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. Monthly expenses are budgeted as follows: Salaries and wages, $31.000 per month advertising. $65.000 per month shipping. 5% of sales: other expenses. 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter will be $44.660 for the quarter f. Each month's ending Inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's Inventory purchases is paid for in the month of purchase, the other half is paid in the following month h. During February, the company will purchase a new copy machine for $2.500 cash During March, other equipment will be purchased for cash at a cost of $78,000 1. During January, the company will declare and pay $45.000 in cash dividends Management wants to maintain a minimum cash balance of $30,000 The company has an agreement with a local bank that wlows the company to borrow in increments of $1000 at the beginning of each month. The interest rate on these Toans 18 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it Isable, repay the loan plus accumulated interest at the end of the quarter Required: Using the data above, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-6 Schedule of expected cash disbursements for merchandise purchases 3. Cosh budget 4. Prepare an absorption costing income statement for the quarter ending March 31 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Req1 Req 2AReg 2B Req3Req 4 Reg 5 Complete the Schedule of expected cash collections: Schedule of Expected Cash Collections January February March Quarter Cash sales 80 200 Creditles 212,800 Total collections 293.000 Reg 2 >