The following data relate to the operations of Lim Corporation, a wholesale distributor of consumer goods: Current assets as of December 31 Accounts receivable Buildings and equipment, net Accounts payable Common shares Retained earnings 32,550 30,135 a. The gross margin is 30% of sales. b.Actual and budgeted sales data are as follows: December (actual) $60,000 February C. Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. d. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. e. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three- quarters is paid for in the following month. The accounts payable at December 31 are the result of f. Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter g.Equipment will be acquired for cash: $3,000 in January and $8,000 in February. h. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows it to borrow up to a total loan balance of $50,000. The interest rate on these loans is 0.5% per month, and interest payments must be made at the end of each month. Assume all borrowing occurs at the beginning of a month. The company will, as far as it is able, repay outstanding loans at the end of each month. Required 1. Using the data above, complete the following schedule Schedule of Expected Cash Collections March February January S 28,000 Quarter Cash sales Credit sales Total collections 36,000 $ 64,000 2. Using the data above, complete the following Merchandise Purchases Budget January Februa ry March Quarter Budgeted cost of goods sold49,000 Add desired ending invento Total needs 11,200 60,200 9,800 $ 50,400 Less beginning inventory Required purchases *$70,000 sales 70% = $49,000 t$80,000 x 70% >20%-$11,200 Schedule of Expected Cash Disbursements-Merchandise Purchases JanuaryFebruary March S 32,550 Quarter $ 32,550 December purchases January purchases February purchases March purchases Total disbursements Beginning balance of the accounts payable 12,600 37,800 50,400 3. Using the data above, complete the following schedule Schedule of Expected Cash Disbursements-Selling and Administrative Expenses Quarter Januar February March Commissions Rent Other expenses Total disbursements $12,000 1,800 5,600 $ 19,400 4. Using the data above, complete the following cash budget: (Round your intermediate calculations and final answers to the nearest whole dollar. Cash deficiency, repayments and interest should be indicated by a minus sign.) January February March Quarter Cash balance, beginning 6,000 64,000 70,000 Add cash collections Total cash available Less cash disbursements: For inventory For operating expenses For equipment 45,150 19,400 3,000 67,550 Total disbursements Excess (deficiency) of cash Financing 2.450 Repayments Interest Total financing Cash balance, ending 5. Prepare an absorption costing income statement for the quarter ended March 31 Lim Corporation Income Statement For the Quarter Ended March 31 Cost of goods sold: Selling and administrative expenses: 6. Prepare a balance sheet as of March 31 Lim Corporation Balance Sheet March 31 Assets Current assets Total current assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity