The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: Current assets as of December 31:1 Cash.... $6,000 Accounts receivable.. $36,000 Inventory.... $9,800 Buildings and equipment, net.. $110,885 Accounts payable. $32,550 Capital stock. $100,000 Retained earnings. $30,135 a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) b. Actual and budgeted sales data are as follows: December (actual). January. February. March April $60,000 $70,000 $80,000 $85,000 $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 (exclud- ing 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 inter- est is not compounded. The company would, as far as it is able, repay the loan plus accumu- lated interest at the end of the quarter. Required: Using the data above: 1. Complete the following schedule: Schedule of Expected Cash Collections January Cash sales $28,000 Credit sales.. 36,000 Total collections.... $64,000 February March Quarter 2. Complete the following: Merchandise Purchases Budget January February March Quarter Budgeted cost of goods sold $49,000* 11,200 Add desired ending inventory Total needs... Less beginning inventory Required purchases *$70,000 sales x 70% -$49,000. *$80,000 x 70% x 20%-$11,200. 60,200 9,800 $50,400 Schedule of Expected Cash Disbursements-Merchandise Purchases January February March Quarter December purchases. January purchases. February purchases March purchases $32,550 12,600 $37,800 $32,550 50,400 Total disbursements. "Beginning balance of the accounts payable. 3. Complete the following schedule: $45,150 Schedule of Expected Cash Disbursements-Selling and Administrative Expenses January February March $12,000 Quarter Commissions Rent, Other expenses Total disbursements. 4. Complete the following cash budget: 1,800 5,600 $19,400 Cash Budget January February March Quarter Cash balance, beginning $ 6,000 Add cash collections.. 64,000 Total cash available 70,000 Less cash disbursements: 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. 5. Prepare an e income statement, for the quarter ended March 31