Mahendra Toys is a wholesale distributor of gifts and accessories. The following data relates to their balance sheet as of 31 December 2019. Current Assets Cash Accounts Receivable Inventory Building and equipment, Net* Total Assets Current Liabilities Accounts Payable Common Shares $ 8,000 $ 42,000 $ 10,200 $136,000 $196,200 $ 30,200 $120,000 Retained Earnings Total Liabilities & Owner's Equity a. The gross margin for the company is 40% of sales. b. Actual and budgeted sales data are as follows- December (Actual) January February March April $80,000 $58,000 $88,000 $63,000 $70,000 $ 46,000 $196,200 c. Sales are 30% in cash and 70% in credit. Credit sales are collected in the month following the sale. d. Each month's ending inventory should be 25% of the following month's budgeted cost of goods sold. e. 30% of the month's inventory purchases are paid for in the month of purchase; the remaining 70% is paid for in the following month. f. Monthly expenses are as follows: salaries, $10,000; rent, $6,000; advertisements, $2,000; other expenses (excluding depreciation), 12% of sales. Depreciation is $3,200 for the quarter and includes depreciation on new assets acquired during the quarter. g. Equipment will be acquired for cash: $4,000 in January and $6,000 in March. h. Management would like to maintain a minimum cash balance of $6,000 at the end of each month. Assume the company can borrow at 0% interest and they do not pay any income tax. All borrowing occurs at the beginning of a month. The company will, as far as it is able, repay outstanding loans at the end of each month Question 1: Prepare the following budgets for each of the first three months of 2020. [20 Marks] Schedule of Expected Cash Collection Merchandise Purchase Budget Schedule of Cash Disbursement for Purchase Schedule of Cash Disbursement for S & A expenses Cash Budget Question 2: Prepare a budgeted income statement for the first three months of 2020 and a budgeted balance sheet as of March 31, 2020 [ 10 Marks]