The following data relate to the operations of Shillow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory $ 9,200 $ 26,800 $ 49,800 Building and equipment, net $ 104,400 $ 29,925 $ 150,000 $ 10,275 Accounts payable Common stock Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) $ 67,000 $ 83,000 April May June July $ 88,000 $113,000 $ 64,000 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales; rent, $4,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $783 per month (includes depreciation on new assets). g. Equipment costing $3,200 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 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 $20,000. 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: Using the preceding data: 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget. 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30, Required 1 Required 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections Cash sales April $ 49,800 May June Quarter Credit sales Total collections 26,800 $ 76,600 Raqulted Required 2 > Required 1 Required 2 Required 3 Required 4. Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases Merchandise Purchases Budget Budgeted cost of goods sold Add desired ending merchandise inventory Total needs Less beginning merchandise inventory Required purchases Budgeted cost of goods sold for April Add desired ending inventory for April April May June Quarter $ 62,250 $ 66,000 52,800 115,050 49,800 $ 65,250 $83,000 sales x 75% = $62,250. $66,000 80% -$52,800. Schedule of Expected Cash Disbursements-Merchandise Purchases March purchases April purchases May purchases April $ 29,925 May June Quarter $ 29,925 32,625 32,625 65,250 June purchases Total disbursements Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Shilow Company Cash Budget April May June Quarter Beginning cash balance 9,200 Add collections from customers 76,600 Total cash available 85,800 Less cash disbursements: For inventory 62,550 For expenses 18,940 For equipment 3,200 Total cash disbursements 84,690 Excess (deficiency) of cash 1,110 available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ended June 30. Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Selling and administrative expenses: Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a balance sheet as of June 30. Shilow Company Balance Sheet June 30 Current assets: Total current assets Assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity