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Prepare an absorption costing income statement for the quarter ending March 31 . \begin{tabular}{|l|l|l|} \hline & & \\ \hline & & \\ \hline & & \\ \hline Total current assets & & \\ \hline & & \\ \hline Total assets & & \\ \hline \multicolumn{1}{|c|}{ Liabilities and Stockholders' Equity } & \\ \hline Current liabilities: & & \\ \hline & & \\ \hline & & \\ \hline Stockholders' equity & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|c|}{ Cash Budget } \\ \hline & \multicolumn{2}{|c|}{ January } & February & \multicolumn{2}{|r|}{ March } & Quarter \\ \hline Beginning cash balance & $ & 52,000 & & & & \\ \hline Add collections from customers & & 289,000 & & & & \\ \hline Total cash available & & 341,000 & 0 & & 0 & 0 \\ \hline \multicolumn{7}{|l|}{ Less cash disbursements: } \\ \hline Inventory purchases & & 222,600 & & & & \\ \hline Selling and administrative expenses & & 125,760 & & & & \\ \hline \multicolumn{7}{|l|}{ Equipment purchases } \\ \hline Cash dividends & & 45,000 & & & & \\ \hline Total cash disbursements & & 393,360 & 0 & & 0 & 0 \\ \hline Excess (deficiency) of cash & & (52,360) & 0 & & 0 & 0 \\ \hline \multicolumn{7}{|l|}{ Financing: } \\ \hline \multicolumn{7}{|l|}{ Borrowing } \\ \hline \multicolumn{7}{|l|}{ Repayments } \\ \hline \multicolumn{7}{|l|}{ Interest } \\ \hline Total financing & & 0 & & & 0 & 0 \\ \hline Ending cash balance & $ & (52,360) & $ & 5 & 0 & 5 \\ \hline \end{tabular} comprece this questoon oy entering your answers in tne cabs besow. Complete the sichedule of expected cash disbursements for merchandise purchases. Complete the merchandise purchases budget: Prepare a balance sheet as of March 31 . Hillyard Company, an office supplies specialty store, gathered the following information to prepare its master budget for the first quarter of the year: 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's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of 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, $27,000 per month; advertising, $67,000 per month; shipping, 5%. of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, wilt be $44,020 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. 9. One half of a month's inventory purchases is paid for in the month of purchase, the other half is paid in the followng month h. During February, the company will purchase a new copy machine for $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. 1. During January, the company will declare and pay $45,000 in cash dividends. 1. Management wants to maintain a minimum cash batance of $30,000. The company has an agreement with a local bank allowing it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 18 per month, and for simplicity, we will assume 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: Rsing the data above, complete the following statements and schedules for the first quarter: Usuired: 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 the Schedule of expected cash collections: Prepare an absorption costing income statement for the quarter ending March 31 . \begin{tabular}{|l|l|l|} \hline & & \\ \hline & & \\ \hline & & \\ \hline Total current assets & & \\ \hline & & \\ \hline Total assets & & \\ \hline \multicolumn{1}{|c|}{ Liabilities and Stockholders' Equity } & \\ \hline Current liabilities: & & \\ \hline & & \\ \hline & & \\ \hline Stockholders' equity & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|c|}{ Cash Budget } \\ \hline & \multicolumn{2}{|c|}{ January } & February & \multicolumn{2}{|r|}{ March } & Quarter \\ \hline Beginning cash balance & $ & 52,000 & & & & \\ \hline Add collections from customers & & 289,000 & & & & \\ \hline Total cash available & & 341,000 & 0 & & 0 & 0 \\ \hline \multicolumn{7}{|l|}{ Less cash disbursements: } \\ \hline Inventory purchases & & 222,600 & & & & \\ \hline Selling and administrative expenses & & 125,760 & & & & \\ \hline \multicolumn{7}{|l|}{ Equipment purchases } \\ \hline Cash dividends & & 45,000 & & & & \\ \hline Total cash disbursements & & 393,360 & 0 & & 0 & 0 \\ \hline Excess (deficiency) of cash & & (52,360) & 0 & & 0 & 0 \\ \hline \multicolumn{7}{|l|}{ Financing: } \\ \hline \multicolumn{7}{|l|}{ Borrowing } \\ \hline \multicolumn{7}{|l|}{ Repayments } \\ \hline \multicolumn{7}{|l|}{ Interest } \\ \hline Total financing & & 0 & & & 0 & 0 \\ \hline Ending cash balance & $ & (52,360) & $ & 5 & 0 & 5 \\ \hline \end{tabular} comprece this questoon oy entering your answers in tne cabs besow. Complete the sichedule of expected cash disbursements for merchandise purchases. Complete the merchandise purchases budget: Prepare a balance sheet as of March 31 . Hillyard Company, an office supplies specialty store, gathered the following information to prepare its master budget for the first quarter of the year: 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's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of 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, $27,000 per month; advertising, $67,000 per month; shipping, 5%. of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, wilt be $44,020 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. 9. One half of a month's inventory purchases is paid for in the month of purchase, the other half is paid in the followng month h. During February, the company will purchase a new copy machine for $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. 1. During January, the company will declare and pay $45,000 in cash dividends. 1. Management wants to maintain a minimum cash batance of $30,000. The company has an agreement with a local bank allowing it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 18 per month, and for simplicity, we will assume 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: Rsing the data above, complete the following statements and schedules for the first quarter: Usuired: 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 the Schedule of expected cash collections