Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data has been assembled to assist in preparing the master budget for the first quarter:

As of Dec 31st (the end of the prior quarter) the companys general ledger showed the following balances:

Cash $56,000 / A/R $212,800 / Inventory $60,150 / Buildings & equip (net) $366,000 / A/P $89,925 / Common Stock $500,000 / Retained Earnings $105,025

Actual sales for Dec and budgeted sales for the next four months are as follows:

Dec $266,000 (actual) / Jan $401,000 / Feb $598,000 / March $313,000 / April $209,000

Sales are 20% cash and 80% credit. All pmts on credit sakes are collected the following month of the sale. The A/R at Dec 31st are a result of Dec credit sales. The companys gross margin is 40% of sales (meaning cost of goods sold is 60% of sales)

Monthly expenses are budgeted as follows:

Salaries and wages $31,000/month / Advertising $65,000/month / shipping 5% of sales / other expenses 3% of sales / depreciation including depreciation on new assets squired during the quarter will be $44,660 for the quarter

Each months ending inventory should equal 25% of the following months cost of goods sold

1/2 of a months inventory purchases is paid for in the month of the purchase, the other half is paid the following month. During Feb, 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

During January, will declare and pay $45,000 in cadh dividends

Management wants to maintain a min cash balance of $30,000. The bank allows the company to borrow in increments of $1000 at the beginning of each month. The interest rate is 1% per month not compounded. The company will repay the loan plus interest at the end of the quarter

Using this data, complete the following statements for the first quarter:

1) schedule of expected cash collections

2) merchandise purchase budget

3) schedule of expected cash disbursements for merchandise purchases

4) cash budget

5) prepare an absorption costing income statement for the quarter ending March 31st

6) prepare a balance sheet as of March 31st