The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 7,200 $ 18, 800 $ 37,800 $ 123,600 $ 22, 425 $ 150,000 $ 14,975 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 47,000 $ 63,000 $ 68,000 $ 93,000 $ 44,000 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, $2,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $927 per month (includes depreciation on new assets). g. Equipment costing $1,200 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 camnaundad Thacomnan d e farm it is nhla randu thalaan ne cumulated intorart at the end of the artar 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Cash sales $ 37,800 $ 40,800 $ 55,800 Credit sales 18,800 27,200 37,200 Total collections $ 56,600 $ 68,000 $ 93,000 Quarter $ 134,400 83,200 Complete this question by entering your answers in the tabs below. 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. Quarter $ 168,000 26,400 194,400 37,800 $ 156,600 Merchandise Purchases Budget April May June Budgeted cost of goods sold $ 47,250 $51,000 $ 69,750 Add desired ending merchandise inventory 40,800 55,800 26,400 Total needs 88,050 106,800 96,150 Less beginning merchandise inventory 37,800|40,8001 55,800 Required purchases $50,250 $66,000 $ 40,350 Budgeted cost of goods sold for April = $63,000 sales x 75% = $47,250. Add desired ending inventory for April = $51,000 ~ 80% = $40,800. Schedule of Expected Cash Disbursements-Merchandise Purchases April May June March purchases $ 22,425 April purchases 25,125 25,125 May purchases 33,000 33,000 June purchases 27,900 Total disbursements $ 47,550 $58,125 $ 60,900 Quarter $ 22,425 50,250 66,000 74,175 $ 212,850 Required 1 Required 3 > 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.) June Quarter Shilow Company Cash Budget April May $ 7,200 $ 4,000 56,600 68,000 63,800 72,000 0 0 58,125 14,240 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance 47,550 13,340 1,200 62,090 1,710 0 72,365 (365) 0 2,290 2,290 0 4,000 $ (365) $ 0 0 $ $ 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: Shilow Company Balance Sheet June 30 Assets Current assets: Total current assets Total assets $ 0 Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity $ 0