Problem $8-29($Algo$)$ Completing a Master Budget $[$LO$8-2,$ LO$8-4,$ LO$8-7,$ LO$8-8,$ LO$8-9,$ LO$8-10]$

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:

a$.$ The gioss margin is $25\%$ of sales.

b$.$ Actual and budgeted sales data:

c$.$ Sales are $60\%$ for cash and $40\%$ on credit Credit sales are collected in the month following sule. The accounts recelvable at March

$31$ are a result of March credit sales.

d$.$ Each month's ending inveritory should equal $80\%$ of the following monthis budgeted cout of ooods sold.

e One haifor a monch's inventory purchases is paid for in the month of purchase, the cther half is paid for in the following month. The

accounts payable at March $31$ are the result of March purchases of inventory.

f$.$ Monthly expenses are as follows commissions, $12\%$ of sales; rent, $$2,300$ per month; other expenses $($excluding depreciation$),6\%$

of sales. Aswume these expenses are pald monthly. Deprecition is $$954$ per morth fincludes depreciation on new assets$).$

Equpment costing $$1500$ will be purchased for cauth in Aprit.

agreement with a local bark allowing it to borrow in increnents of $$1,000$ at the beginning of each month up to a botal loan balance

company would, as far as it is able, repoy the loan plus accurnutated interest at the end of the quarter.

Required:

Using the preseding dots:

Compiete the schedule of expected cash collections.

Conglete the meichundse purchases budget and the schedule of expected cash disbursements for merchandise purchases.

Complete the cash budot.

Preptre an absiorption cossing income utatemsent for the quater ended Jane $30.$