Hillyard Company, an office supplies specislty store, prepares its master budgt on a quarterly basis. The following dots have been assembled to assist in prepsring 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 $ 48,800 224,888 68,880 Accounts receivable Inventory Buildings and equipnent (net) Accounts payable Common stock Retained earnings 378,800 $93,800 50e,800 189.808 $782 , eee $792 , eee b. Actusl sales for December and budgeted ssles for the next four months sre as follows: Decenber(actual) $289,888 $499,888 $608,888 $38e,ee0 $28e,ee8 February Sales ore 2096 for cash and 80% on credit. All peyments on credit sales are collected in the month following sale. The accounts receivable st December 31 are s result of December credit soles. 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, $27000 per month: sdvertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be S42,000 for the quarter Each month's ending inventory should equal 25% ofthe following month's cost of goods sold. g. One-half of month's inventory purchases is paid for in the month of purchase; the other half is paid in h. During Februsry, the company will purchase a new copy machine for $1,700 cash. During March, other i. During January, the company will declare and pay $45,000 in cash dividends. the following month. equipment will be purchased for cash st a cost of S84,500 j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that ellows the company to borrow in increments of $1,000 at the beginning of esch 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 for as it is able, repsy the loan plus accumulsted interest at the iDuring Janusry, the company will declare and pay $45,000 in cash dividends. j. Management wants to maintsin a minimum cash balance of $30,000. The company has an sgreement with a local bank thst allows the company to borrow in increments of S1,000 at the beginning of esch 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 for es it is able, repay the loan plus accumulated interest at the end of the quarter. Required: Using the dsts above, complete the following statements and schedules for the first quarter: 1. Schedule of expectedcash collections: 2-3. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepsre an absorption costing income ststement for the querter ending March 31 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Complete the schedule of expected ash colections. Sohedule of Expeated Cach Collectionc February March Guarier E B0,000 Credt sales D304,000 Required 2A > 1. Schedule of expected cash collections: 2-3. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases 3. Cash budget: 4. Prepere an absorption costing income ststement for the qusrter ending March 31. 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Complete the merchancise purchases budget January February Meron Qusrder Eudgeted cst ot goods sel Add desred ending ihventary Tota meeds Les beaing inventory Resuired purchases -$400,000 sses : 50% cost rsto-5240, oco. TS360 000 2-%-890 ooo. 90,0001 270 8 280,000 Required 2B 1. Schedule of expected cash collections: 2-3. Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget 4. Prepare an sbsorption costing income ststement for the querter ending March 31. 5. Prepare a balance sheet s of March 31 Complete this question by entering your answers in the tabs below. Complete the scheclule ot expected cash disbursements tor merchandise purchasee Sohedule of Expeoted Cash Dicburcementc for Merohandise Purohacet JenuaryFebruary Maroh Guarter 33,000 270,000 euan purcrases Feouary purchesss March pucreses