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

1. The gross margin is 25% of sales.

2. Actual and budgeted sales data:

3. 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.

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

5. 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.

6. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,100 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).

7. Equipment costing $2,300 will be purchased for cash in April.

8. 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.

Need help with these:

Current assets as of March 31: $ 8,300 $ Cash Accounts receivable 23,200 $ Inventory Building and equipment, net Accounts payable 44,400 $126,000 $ 26,550 $ 150,000 $ Common stock Retained earnings 25,350 March (actual) April $58,000 $74,000 $ 79,000 $104,000 $ 55,000 ay June July Required 2 Required 3 Required 4 Required 1 Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May Quarter June $44,400 Cash sales Credit sales 23,200 $ 67,600 $ $ $ 0 0 0 Total collections Required 2 Required 3 Required 4 Required 5 Required 1 Complete the merchandise purchases budget and the schedule of expected cash disburs Merchandise Purchases Budget April May June Quarter $55,500 59,250 Budgeted cost of goods sold Add desired ending merchandise inventory 47,400 Total needs 102,900 59,250 0 0 Less beginning merchandise inventory 44,400 $ 58,500 59,250$ Required purchases Budgeted cost of goods sold for April $74,000 sales x 75% 0 = $55,500 Add desired ending inventory for April $59,250 x 80% = $47,400. Schedule of Expected Cash Disbursements-Merchand ise Purchases April May June Quarter $ 26,550 March purchases 26,550 April purchases 29,250 29,250 58,500 May purchases June purchases O 85,050 $ 55,800 29,250 $ Total disbursements Required 1 Required 4 Required 5 Required 2 Required 3 Complete the cash budget. (Cash deficiency, repayments and interest should be Shilow Company Cash Budget April May June Quarter Beginning cash balance 8,300 Add collections from customers 67,600 75,900 Total cash available 0 0 0 Less cash disbursements: For inventory 55,800 For expenses 16,420 For equipment 2,300 Total cash disbursements 0 0 0 74,520 Excess (deficiency) of cash available over disbursements 1,380 0 0 0 Financing: Borrowings Repayments Interest Total financing 0 0 0 0$ 1,380 $ $ $ Ending cash balance 0 0 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: 0 0 0 Selling and administrative expenses: 0 0 Required 2 Required 3 Required 5 Required 1 Required 4 Prepare a balance sheet as of June 30 Shilow Company Balance Sheet June 30 Assets Current assets: Total current assets 0 $ 0 Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity 0