Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of 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: Cash Accounts receivable Inventory Buildings and equipment (net), Accounts payable Capital shares Retained earnings: Debits Credits $ 49,000 216,000 57,000 379,000 $ 93,000 505,000 103,000 $701,000 $701,000 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February Marchi April $270,000 380,000 590,000 280,000 180,000 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 e Monthly expenses are budgeted as follows: salaries, and wages, $23,000 per month; advertising, $67,000 per month; shipping, 5% of sales; depreciation, $15,000 per month; other expenses, 3% of sales t. At the end of each month, Inventory is to be on hand equal to 25% of the following month's sales needs, stated at cost. g. One-half of a month's inventory purchases are paid for in the month of purchase, the other half are paid for in the following month. h During February, the company will purchase a new copy machine for $1,000 cash. During March, other equipment will be purchased for cash at a cost of $85,500 1. During January, the company will declare and pay $47,000 in cash dividends. The company must maintain a minimum cash balance of $32,000 An open line of credit is available at a local bank for any borrowing that may be needed during the quarter All borrowing is done at the beginning of a month, and all repayments are made at the end of a month. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid only at the time of payment of principal The annual interest rate is 12% (Figure interest on whole months, eg, 1/12, 2/12) 4. Cash budget (Roundup "Borrowing" and "Repayments" answers to the nearest whole dollar amount. Any "Repayments" and "Interest" should be Indicated by a minus sign.) Answer is not complete. Cash balance, beginning Add Collections from sales Total cash available Deduct: Disbursements: Purchases of inventory Purchases of equipment Cash dividends Operating expenses Total disbursements Excess (deficiency) of cash Financing: Repayments Interest Total financing Cash balance, ending HILLYARD COMPANY Cash Budget January February March Quarter O 0 0 0 0 0 0 0 0 0 0 0 0 6. Prepare a balance sheet as of March 31. Current assets: Total current assets Answer is not complete. HILLYARD COMPANY Balance Sheet As of March 31 Assets 0 Total assets 0 Liabilities and Shareholders' Equity Current liabilities Stockholders' equity Total shareholders' equity Total liabilities and shareholders' equity 0 0