The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:

Current assets as of March 31:
Cash	$	7,400
Accounts receivable	$	19,600
Inventory	$	39,000
Building and equipment, net	$	126,000
Accounts payable	$	23,175
Capital stock	$	150,000
Retained earnings	$	18,825

The gross margin is 25% of sales.

Actual and budgeted sales data:

March (actual)	$	49,000
April	$	65,000
May	$	70,000
June	$	95,000
July	$	46,000

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.

Each months ending inventory should equal 80% of the following months budgeted cost of goods sold.

One-half of a months 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.

Monthly expenses are as follows: commissions, 12% of sales; rent, $2,200 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $945 per month (includes depreciation on new assets).

Equipment costing $1,400 will be purchased for cash in April.

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 data above:

1. Complete the following schedule.

1. Complete the following schedule Schedule of Expected Cash Collections June April May Quarter $ 39,000$42,000$ 57,000 $ 138,000 73,600 Total collections $58,600$ 68,000 85,000$ 211,600 Cash sales Credit sales 19,600 26,000 28,000 2. Complete the following Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold 48,750 $ 52,5071,250 $ 172,500 Add desired ending inventory Total needs Less beginning inventory Required purchases 57,000 109,500 42,000 84,600 42,000 90,750 39,000 $ 51,75067,500 $ 27,600 98,850257,100 57,000 41,850$119,100 138,000 Schedule of Expected Cash Disbursements-Merchandise Purchases April $ 23,175 May June Quarter March purchases April purchases May purchases June purchases Total disbursements $ 23,175 25,875 25,875 51,750 $ 49.050$25.875 S 0 $ 74,925