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 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 9,100 $ 26,400 $ 49,200 $ 106,800 $ 29,550 $ 150,000 $ 66,000 $ 82,000 $ 87,000 $112,000 $ 63,000 $ 11,950 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, $3,900 per month; other expenses (excluding depreciation), 6% of sales. Assume these expenses are paid monthly. Depreciation is $801 per month (includes depreciation on new assets). g. Equipment costing $3,100 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 allowing it 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 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: 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 S Complete the schedule of expected cash collections. Schedule of Expected Cash Collections Cash sales Credit sales: Total collections April $ 49,200 May June Quarter 26,400 $ 75,600 $ 0 $ 0 $ 0 Required 1 Required 2 Required 3 Required 4 Required S Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold $ 61,500 $ 65,250 Add desired ending merchandise inventory Total needs 52,200 113,700 65,250 0 0 Less beginning merchandise inventory Required purchases 49,200 $ 64,500 $ 65,250 $ 0 $ 0 Budgeted cost of goods sold for April Add desired ending inventory for April $82,000 sales x 75% = $61,500. $65,250 x 80% $52,200. March purchases April purchases May purchases Schedule of Expected Cash Disbursements-Merchandise Purchases. April May $ 29,550 32,250 32,250 June Quarter $ 29,550 64,500 June purchases Total disbursements $ 61,800 $ 32,250 $ 0 $ 94,050 Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. Note: Cash deficiency, repayments and interest should be indicated by a minus sign. Beginning cash balance Shilow Company Cash Budget Total cash available Add collections from customers 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- April May June Quarter $ 9,100 75,600 84,700 0 0 0 61,800 18,660 3,100 83,560 0 0 0 1,140) 0 0 0 0 0 0 0 $ 1,140 $ 0 $ 0 $ Required 1 Required 2 Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ended June 30. Cost of goods sold: Shilow Company Income Statement For the Quarter Ended June 30 Selling and administrative expenses: 0 0 0 0 0 0 Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a balance sheet as of June 30. Current assets: Total current assets Shilow Company Balance Sheet June 30 Assets 0 Total assets $ 0 Liabilities and Stockholders' Equity Stockholders' equity Total liabilities and stockholders' equity Required 4 $ 0 0 Required 5