Hllyard Company, an office supplies speclalty 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: 8 a. As of December 31 (the end of the prior quarter), the company's general ledger showed the folloWIng account balances: $56,8ee 212,888 Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings 366,800 $ 89,925 58e,888 185,825 $ 694,958 694,958 b. Actual sales for December and budgeted sales for the next four months are as follows: $ 266,888 $481,8ee $598,808 $313,808 $ 289,808 December (actual) January March April C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts recelvable at December 31 are a result of December credit sales. 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, $31,000 per month; advertising. $65,000 per month. Shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,660 for the quarter. Each month's ending inventory should equal 25% of the following month's cost of goods sold g. One-half of a month's Inventory purchases is pald for In the month of purchase; the other half is pald In the following month. h. During February, 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 L During January, the company will declare and pay $45,000 In cash dividends. 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 Required: Using the data above, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing Income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below Required 1 Required 2A Required 28Required 3 Required Required 5 Complete the Schedule of expected cash collections: Schedule of Expected Cash Collections January February March 5 80,200 Quarter Cash sales Credit sales Total collections 5 80,200 212,800 0 293,000 212,800 5 293,000 S Required 2A > Complete this question by entering your answers in the tabs below Required 1Required 2A Required 2B Required 3 Required 4 Required 5 Complete the merchandise purchases budget: Merchandise Purchases Budget January February 240,600 5 358,800 March Quarter Budgeted cost of goods sold Add desired ending inventory Total needs Less beginning inventory Required purchases *$401,000 sales 60% cost ratio-$240.600 t5358,800 25%-$89.700. 89,700t 30,300358,800 60.150 5 270,150 358,800S 0 S 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 January purchases February purchases March purchases Total cash disbursements for purchases 5 89,925 S 89,925 135,075 135,075 270,150 5 225,000 S 135,075 S 0 S 360,075 Required 2A Required 3 > Complete this question by entering your answers in the tabs below Required 1Required 2ARequired 2B Required 3 Required 4Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.]) Hillyard Company Cash Budget January February March Quarter Beginning cash balance Add cash collections Total cash available Less cash disbursements 56,000 293.000 349,000 Inventory purchases Selling and administrative Equipment purchases Cash dividends 225,000 expenses 128,080 Total cash disbursements Excess (deficiency) of cash Financing 45,000 398,080 49,080) Borrowings Repayments Interest Total financing Ending cash balance (49.080 Complete this question by entering your answers in the tabs below Required 1 Required 2A Required 2B Required 3 Required 4Required 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: Required 3 Required 5 >