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

Current assets as of March 31:
Cash	$	8,300
Accounts receivable	$	23,200
Inventory	$	44,400
Building and equipment, net	$	126,000
Accounts payable	$	26,550
Capital stock	$	150,000
Retained earnings	$	25,350

a.	The gross margin is 25% of sales.
b.	Actual and budgeted sales data:

March (actual)	$58,000
April	$74,000
May	$79,000
June	$104,000
July	$55,000

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 months ending inventory should equal 80% of the following months budgeted cost of goods sold.
e.	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.
f.	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).
g.	Equipment costing $2,300 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. 1.) Schedule of Expected Cash Collections April May June Quarter Cash Sales 44,400 Credit Sales 23,200 Total Collections 67,600

2.) Merchandise Purchase Budget

April May June Quarter

Budget Cost of Goods Sold 55,500

Add: Desired Ending Inventory 47,400

Total Needs 102,900

Less: Beginning Inventory 44,400

Required Purchases 58,500

	Budgeted cost of goods sold for April = $74,000 sales 75% = $55,500.
	Add desired ending inventory for April = $59,250 80% = $47,400. 3.) Schedule of Expected Cash Disbursements -Merchandise Purchases April May June Quarter March Purchases 26,550 April Purchases 29,250 29,250 May Purchases June Purchases Total Disbursements