The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods.

Problem hapter: : Problem: The following data relate to the operations of Picanuy 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 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||$60,000 January $70,000 February $80,000 March $85,000 April $55,000 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 cold 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 . Monthly expenses are as follows-commissions, $12,000, rent, $1,800; other expenses (excluding depreciationi, 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 55,000 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 S50,000. 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 Required 4. Complete the following cash budget: ary F February March Quarter Cash Budget January $ 6,000 64,000 70,000 .... = .... ... Cash balance, beginning. Add cash collections. Total cash available. Less cash disbursements: For inventory.. For operating expenses For equipment ... Total cash disbursements. Excess (deficiency) of cash. Financing Etc. 45,150 19,400 3,000 67,550 2,450 .. . 5. Prepare an absorption costing income statement, si for the quarter ended March 31. 6. Prepare a balance sheet as of March 31