Saved Help The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 311 Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 8,000 $ 20,000 $ 36,000 $ 120,000 $ 21,750 $ 150,000 $ 12,250 a. The gross margin is 25% of sales, b. Actual and budgeted sales data: March (actual) Apr1 May June July $ 50.000 $ 60,000 $ 72,000 $90,000 $ 48,000 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 Monthly expenses are as follows commissions, 12% of sales; rent, $2,500 per month other expenses (excluding depreciation). 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets) g. Equipment costing $1.500 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 total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loon plus accumulated interest at the end of the quarter FIL Nave May June July $ 72,000 $ 90,000 $ 48,000 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, $2,500 per month other expenses (excluding depreciation), 6% of sales, Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets) g. Equipment costing $1,500 will be purchased for cash in Aphil. 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 total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that 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: Using the preceding data: 1. Complete the schedule of expected cash collections 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget. 4. Prepare an absorption costing Income statement for the quarter ended June 30, 5. Prepare a balance sheet as of June 30 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purch 3. Complete the cash budget. 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30. 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 Cash sales Credit sales Total collections Schedule of Expected Cash Collections April May June $ 35,000 20.000 $ 56,000 $ 0 $ 0 $ 0 Regu Required 2 > Complete this question by entering your answers in the tabs below. 0 Required Required 2 Required 3 Required 4 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold $ 45,000 $ 54.000 Add desired ending merchandise inventory 43,200 Total needs 88,200 54.000 0 Less beginning merchandise inventory 36.000 Required purchases $ 52,200 $ 54,000 $ 0 $ Budgeted cost of goods sold for Apni 500.000 75% = $45,000 Add desired ending inventory for Apri554,000 30% -543.200 Schedule of Expected Cash Distrements Merchandise Purchases April June Outer $ 21.750 $ 21,750 March purchase April purchases 26,100 $ 26,100 52.200 May purchases June purch 5 47.850 5 26.100 0 $ 73,050 Total disbursements Bond May June Quarter 0 0 0 Shllow Company Cash Budget April Beginning cash balance $ 8,000 Add collections from customers 56,000 Total cash available 64,000 Loss cash disbursements: For inventory 47,850 For expenses 13,300 For equipment 1,500 Total cash disbursements 62,650 Excess (deficiency) of cash available over disbursements 1,350 Financing Borrowings Repayments Interest 0 Total financing Ending cash balance $ 1,350 $ 0 0 0 0 0 0 0 0 0 0 $ $ 0 Required 1 Required 2 Required Help Save & Exit Required 4 Submit Required 5 Prepare an absorption costing Income statement for the quarter ended June 30 Shilaw Company Income Statement For the Quarter Ended June 10 Cost of goods sold 0 0 0 Selling and administrative expenses 0 0 0