Problem 8-29 Completing a Master Budget (L08-2, L08-4, L08-7, L08-8, L08-9, L08-10) The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 8,700 $ 24,800 $ 46,800 $ 116,400 $ 28,050 $ 150,000 $ 18,650 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 62,000 $ 78,000 $ 83,000 $ 108,000 $ 59,000 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other 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, $3,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $873 per month (includes depreciation on new assets). g. Equipment costing $2,700 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. 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, up to a 10 points Skipped Required: Using the preceding data: 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expe 3. Complete the cash budget. 4. Prepare an absorption costing income statement for the quarter ended 5. Prepare a balance sheet as of June 30. eBook Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Quarter Schedule of Expected Cash Collections April May June Cash sales $ 46,800 Credit sales 24,800 Total collections $ 71,600 $ 0 $ 0 $ 0 Required 1 Required 2 Required 3 Required 4 Required 5 points Skipped Complete the merchandise purchases budget and the schedule of expected cash disbursements for me Quarter eBook $ 0 Merchandise Purchases Budget April May June Budgeted cost of goods sold $ 58,500 $ 62,250 Add desired ending merchandise inventory 49,800 Total needs 108,300 62,250 Less beginning merchandise inventory 46,800 Required purchases $ 61,500 $ 62,250 $ 0 Budgeted cost of goods sold for April = $78,000 sales 75% = $58,500. Add desired ending inventory for April = $62,250 x 80% = $49,800. Schedule of Expected Cash DisbursementsMerchandise Purchases April May June March purchases $ 28,050 April purchases 30,750 30,750 May purchases June purchases Total disbursements $ 58,800 $ 30,750 $ 0 Quarter $ 28,050 61,500 $ 89,550 Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by ar points Skipped Shilow Company Cash Budget April May June Quarter $ 8,700 71,600 80,300 0 0 0 eBook Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: 58,800 17,540 2,700 79,040 0 0 0 1,260 000 Borrowings Repayments Interest Total financing Ending cash balance 0 0 1,260 $ 0 0 0 0 $ $ Plepale al USUI PLIUI LUSLILY LUIe slalelerle IUI ile yuuiler Lucu JU JU. points Shilow Company Income Statement For the Quarter Ended June 30 Skipped Cost of goods sold: eBook Selling and administrative expenses: Prepare a balance sheet as of June 30. Skipped Shilow Company Balance Sheet June 30 Assets Current assets: eBook Total current assets 0 Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity