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:

	Debits	Credits
Cash	$52,000
Accounts receivable	213,000
Inventory	40,400
Buildings and equipment (net)	374,000
Accounts payable		$97,000
Capital stock		504,000
Retained earnings		78,400
	$679,400	$679,400

b.	Actual sales for December and budgeted sales for the next four months are as follows:

December (actual)	$284,000
January	$404,000
February	$604,000
March	$304,000
April	$204,000

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 at December 31 are a result of December credit sales.
d.	The company's gross margin is 50% of sales. (In other words, cost of goods sold is 50% of sales.)
e.	Monthly expenses are budgeted as follows: salaries and wages, $27,400 per month: advertising, $74,000 per month; shipping, 6% of sales; other expenses, 2% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,400 for the quarter.
f.	Each month's ending inventory should equal 20% 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 $2,100 cash. During March, other equipment will be purchased for cash at a cost of $84,900.
i.	During January, the company will declare and pay $45,400 in cash dividends.
j.	Management wants to maintain a minimum cash balance of $30,000. 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. 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.

Using the data above, complete the following statements and schedules for the first quarter:

Cash budget. (Leave no cells blank - be certain to enter "0" wherever required. Show deficiencies, repayments, interest and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Omit the "$" sign in your respone.)

	January	February	March	Quarter
Cash balance, beginning	$52,000	$	$	$
Add cash collections	314,000
Total cash available	366,000
Less cash disbursements:
Inventory purchases	208,000
Selling and administrative expenses	133,720
Equipment purchases
Cash dividends	45,400
Total cash disbursements	387,120
Excess (deficiency) of cash	(21,120)
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending	$	$	$	$

Requirement 5:

Prepare an absorption costing income statement for the quarter ending March 31. (Input all amounts as positive values. Omit the "$" sign in your response.)

Hillyard Company Income Statement For the Quarter Ended March 31
(Click to select)DepreciationRent expensesSalesEnding inventoryGoods available for saleBeginning inventoryOffice expenses		$
Cost of goods sold:
(Click to select)Rent expensesPurchasesDepreciationGoods available for saleEnding inventoryOffice expensesBeginning inventory	$
(Click to select)LessAdd: (Click to select)Rent expensesEnding inventoryGoods available for salesPurchasesDepreciationBeginning inventoryOffice expenses
(Click to select)Ending inventoryOffice expensesGoods available for saleDepreciationRent expensesBeginning inventoryPurchases
(Click to select)Ending inventoryDepreciationOffice expensesBeginning inventoryPurchasesGoods available for saleRent expenses
(Click to select)Gross lossGross margin
Selling and administrative expenses:
(Click to select)Other expensesOffice expensesShippingSalaries and wagesRentAdvertisingDepreciation
(Click to select)AdvertisingOther expensesShippingOffice expensesSalaries and wagesRentDepreciation
(Click to select)Office expensesDepreciationRentAdvertisingShippingOther expensesSalaries and wages
(Click to select)Office expensesDepreciationAdvertisingRentShippingOther expensesSalaries and wages
(Click to select)RentOther expensesAdvertisingDepreciationOffice expensesSalaries and wagesShipping
(Click to select)Net operating lossNet operating income
(Click to select)Beginning inventoryCost of goods manufacturedRent expensesOffice expensesDepreciationInterest expenseEnding inventory
(Click to select)Net incomeNet loss		$

Requirement 6:

Prepare a balance sheet as of March 31. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)

Hillyard Company Balance Sheet March 31
Assets			Liabilities and Equity
Current assets:			Current liabilities:
(Click to select)Accounts payableAccounts receivableInventoryBuildings and equipment, netCash	$		(Click to select)Bank loan payableInventoryAccounts payableCashAccounts receivable		$
(Click to select)CashInventoryAccounts receivableBuildings and equipment, netAccounts payable
(Click to select)InventoryCashBuildings and equipment, netAccounts receivableAccounts payable			Stockholders' equity:
Total current assets			(Click to select)InventoryAccounts payableRetained earningsCapital stockAccounts receivable	$
(Click to select)SuppliesAccounts receivableBuildings and equipment, netCashInventory			(Click to select)InventoryRetained earningsCapital stockAccounts payableAccounts receivable
Total assets		$	Total liabilities and equity		$