The foilowing data relate to the second quarter operations of Leisure Sports, a wholesale distributor of consumer sporting goods, as of March 31: Cash $ 9,888 Accounts receivable 48,800 Inventory 12 , 688 Building and equipment, net 214,160 Accounts payable 18,360 Coil-non shares 190,086 Retained earnings 75,486 a. Actual sales for March and budgeted sales for April through July are as follows: March (actual) $66,600 Apr 11 296,900 May 8 5 , 600 June 96,696 July 50,609 b. Sales are 20% cash and 80% credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. c. The company's gross margin is 40% of sales. d. Monthly expenses are as follows: salaries and wages $1500 per month; shipping, 6% of sales; advertising, $6,000 per month: other expenses, 4% of sales. Depreciation. including depreciation on new assets acquired during the quarter, will be $6,000 in total for the quarter. e. Each month's ending inventory should equal 30% of the following months cost of goods sold. f. 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. 9. Equipment costing $11500 will be purchased for cash in April and $3,000 will be purchased for cash in May. h. Dividends of $3,500 will be declared and paid in June. 1. The company must maintain a minimum cash balance of $8.000. An open line of credit is available at a local bank, All borrowing is done at the beginning of a month. and all repayments are made at the end of a month' The monthly interest rate is 1%, Interest must be paid at the end of each month based on the total loans outstanding for that month. Required: Using the data above, complete the foilowing: 4. Cash budget: (Round your intermediate calculations and final answers to the nearest whole dollar. Also calculations to the next whole dollar amount. Cash deficiency, repayments and interest should be indicat X Answer is complete but not entirely correct. Cash Budget April May June Quarter Cash balance, beginning $ 9,000 $ 8,250 x $ 8,048 x $ 9,000 Add cash collections 62,000 73,000 86,000 221,000 Total cash available 71,000 81,250 94,048 230,000 Less cash disbursements: For inventory purchases 40,650 48,300 49,350 138,300 For selling and administrative expenses 20,500 22,000 22,500 65,000 For equipment purchases 11,500 3,000 14,500 For dividend payments 0 3,500 3,500 Total cash disbursements 72,650 73,300 75,350 221,300 Excess (deficiency) of cash (1,650) 7,950 18,698 8,700 Financing: Borrowings 10,000 X 200 X 10,200 Repayments (10,200) X (10,200) Interest (100) X (102) X (102) X (304) Total financing 9.900 98 (10,302) (304) Cash balance, ending 8,250 $ 8.048 $ 8,396 S 8,3965. Prepare an absorption costing income statement for the quarter ended June 30. ' 6 Answer is not complete. s 245.com _ _ _ Q Answer is complete but not entirely correct. Current assets: Cash Account receivable (R 3,390 9 72,000 0 Inventory 9,000 a 89,396 222,600 0 s 311,996 Total current assets Buildings and equipment. net Total assets Liabilities and Stockholders' Equity 5 23,400 0 Account payable Slockholders' equity: Common stock 190,000 9 Retained eamings a 93.595 9 _ Total liabilities and stockholders' equity _$ 311,996