Please answer Required 1 to 5.

PROBLEM 8-31 Completing a Master Budget LO8-2, LO8-4, LO8-7, LOB-8, LO8-9, LO8-10 Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly jasis. The following data have been assembled to assist in preparing the mastar 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 at 80% on credit. All payments on credit sales are collected in the monat following sale. The accounts reccivable at December 31 are a result of December ctedit sales. i. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60 of salek.) e. Monthly expenses are bodgeted as follows: salaries and wages, $27,000 per menth, advertising. $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 $42.000 for the quariet. 1. Fach month'r ending invertoty chould equal 25% of the following month's cout of grods wold. g. Onc-half of a moeth's inventory purchases is paid for ia the month of purchase: the ocher half is paid. in the following nonth. h. During February, the conpany will purchase a new capy machine for \$1,700 cask. During March, other equipaneat will be parchased for cash at a cost of 584,500 . i. During Jasuary, the company will declare and pay $45.000 is cash dividends. 1. Management wants to maintain a minimum cash balance of $30,000. The company aas an agreement with a local bank that allows the company to borrow in incremests of $1,000 at the heginining of each month. The interest rate ou these loans is 1 fy per month and for simplicity we will aisume that interest is not compoanded. The company woald, as far as it is able, repay the loas plus accamulated interest at the end of the quarter Required: Using the data above, complet: the following statements and ochedules for the first quarter 1. Sichedule of expected cash collections: 2. a. Merchandise purchases bodget: b. Schedule of expected cash distursements for merchundise purchases: 3. Cash budget: 4. Using Schedule 9 as your guide, prepare an absorption costing income statement for the quarter ending March 31 . 5. Prepare a balance sheet as of March 31