The following data relate to the operations of Dillinger Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Capital stock Retained earnings $ 16,000 $ 28,800 $ 16,940 $310,000 $ 53,500 $ 57,000 $261,240 a. Gross margin is 30% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 96,000 $ 121,000 $ 145,000 $ 153,000 $ 65,000 c. Sales are 70% for cash and 30% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are the result of March credit sales. d. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. e. 25% of a month's inventory purchases is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable at March 31 are a result of March purchases of inventory. f. Monthly expenses are as follows: salaries and wages, $29,500; rent, $5,300 per month; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $8,000 per month (includes depreciation on new assets). g. Equipment costing $7,000 will be purchased for cash in April. h. The company must maintain a minimum cash balance of $5,000. 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; borrowing must be in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of repayment of principal; figure interest on whole months (1/12, 2/12, and so forth). 5. Prepare an absorption costing income statement for the quarter ended June 30. Dillinger Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Selling and administrative expenses: $ 0 6. Prepare a balance sheet as of June 30. Dillinger Company Balance Sheet June 30 Assets Current assets: Total current assets Total assets Liabilities and Stockholders' Equity Current liabilities: Stockholders' equity: Total liabilities and equity $