The following data relate to the operations of Lim Corporation, a wholesale distributor of consumer goods: Current assets as of December 31: Cash $6,000 Accounts receivable $36,000 Inventory $9,800 Buildings and equipment, net $110,885 Accounts payable $32,550 Common shares $100,000 Retained earnings 30,135 a. The gross margin is 30% of sales. b. Actual and budgeted sales data are as follows: December (actual) $60,000 January $70,000 February $80,000 March $85,000 April $55,000 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 December purchases of inventory. 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 the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. 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. Page 395 Required: Using the data above: 1. Complete the following schedule: Schedule of Expected Cash Collections January February March Quarter Cash sales $28,000 Credit sales 36,000 Total collections $64,000 2. Complete the following: Merchandise Purchases Budget January February March Quarter Budgeted cost of goods sold $49,000* Add desired ending inventory 11,200 Total needs 60,200 Less beginning inventory 9,800 Required purchases $50,400 *$70,000 sales 70% = $49,000. $80,000 70% 20% = $11,200. Schedule of Expected Cash DisbursementsMerchandise Purchases January February March Quarter December purchases $32,550* $32,550 January purchases 12,600 $37,800 50,400 February purchases March purchases Total disbursements $45,150 *Beginning balance of the accounts payable. 3. Complete the following schedule: Schedule of Expected Cash DisbursementsSelling and Administrative Expenses January February March Quarter Commissions $12,000 Rent 1,800 Other expenses 5,600 Total disbursements $19,400 4. Complete the following cash budget: January February March Quarter Cash balance, beginning $6,000 Add cash collections 64,000 Total cash available 70,000 For inventory 45,150 For operating expenses 19,400 For equipment 3,000 Total cash disbursements 67,550 Excess (deficiency) of cash $2,450 Financing Etc. Page 396 5. Prepare an absorption costing income statement, similar to the one shown inSchedule 9 on page 367, for the quarter ended March 31. 6. Prepare a balance sheet as of March 31