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:

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

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 is gross margin is 40% of sales (in other words cost of good sold a 60% of sales).

e. Monthly expenses are budgeted as follows: salaries and wages, 37,000 per month; advertising, 59,000 per month; shipping, 5% of sales, other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be 45,620 for the quarter.

f. Each month ending inventory should equal 25% of the following months cost of good 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 $3,200 cash. During March, other equipment will be purchased for cash at the cost of $81,000.

i. During January, the company will declare and pay $45,000 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 loan 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 Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings 62,000 217,600 61,050 372,000 $ 91,725 500,000 120,925 712,650 $ 712,650 $ December(actual) January February March April $ 272,000 $ 407,000 $ 604,000 $ 319,000 $ 215,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the Schedule of expected cash collections: Quarter Schedule of Expected Cash Collections January February March Cash sales $ 81,400 Credit sales 217,600 Total collections $ 299,000 April Required 2A > Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required 5 Complete the merchandise purchases budget: March Quarter Merchandise Purchases Budget January February Budgeted cost of goods sold 244,200 $ 362,400 Add desired ending inventory 90,6007 Total needs 334,800 Less beginning inventory 61,050 Required purchases *$407,000 sales * 60% cost ratio = $244.200 +5362,400 - 25% = $90,600 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the schedule of expected cash disbursements for merchandise purchases. Schedule of Expected Cash Disbursements for Merchandise Purchases January February March Quarter December purchases $ 91,725 January purchases 136,875 136,875 February purchases March purchases Total cash disbursements for purchases Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sic Hillyard Company Cash Budget January February 62,000 299,000 March Quarter A 228,600 128,560 Beginning cash balance Add cash collections Total cash available Less cash disbursements: Inventory purchases Selling and administrative expenses Equipment purchases Cash dividends Total cash disbursements Excess (deficiency) of cash Financing Borrowings Repayments Interest Total financing Ending cash balance 45,000 402,160 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 ARCU Required 4 Required 5 Prepare an absorption costing income statement for the quarter ending March 31. Hillyard Company Income Statement For the Quarter Ended March 31 Cost of goods sold: Selling and administrative expenses Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Required 4 Required s Prepare a balance sheet as of March 31. Hillyard Company Balance Sheet March 31 Assets Current assets: Total current assets Total assets Liabilities and Stockholders' Equity Current liabilities: Stockholders' equity Total liabilities and stockholders' equity