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 Buildings and equipment, net Accounts payable Common shares Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows: March (actual) April May June $50,000 $60,000 $72,000 $90,000 $ 8,000 20,000 36,000 120,000 21,750 150,000 12,250 March (actual) $50,000 $60,000 $72,000 $90,000 $48,000 April May June July 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 the 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 one-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 $2,500; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month and includes depreciation on new assets g. Equipment will be acquired for cash: $1,500 in April h. Management would like to maintain a minimum cash balance of $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow as needed 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: 3. Complete the following cash budget: (Cash deficiency, repayments and interest should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest whole dollar.) Answer is complete but not entirely correct. Beginning cash balance Add collections from customers Total cash available. Less cash disbursements: For inventory For expenses For equipment Shilow Company Cash Budget April May June Quarter $ 8,000 $ 4,350 S 4,590 S 8,000 56,000 67,200 82,800 206,000 64,000 71,550 87,390 214,000 47,850 58,500 53,550 159,900 13,300 15,460 18,700 47,460 1,500 0 00 1,500 33.000. 33.350 300.000 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. 41.000 DB,DUU 33,000 13,300 15,460 18,700 47,460 1,500 00 00 1,500 62,650 73,960 72,250 208,860 1,350 (2,410) 15,140 5,140 3,000 7,000 00 10,000 00 03 (10,000) (10,000) 00 0 (230) (230) 3,000 7,000 (10,230) (230) $ 4,350 $ 4,590 $ 4,910 $ 4,910 Goods available for sale Ending inventory Gross margin 195,300 28,800 166,500 55,500 Selling and administrative expenses: Commissions 26,640 Rent 7,500 Depreciation 2,700 Other expenses 13,320 Net operating income Interest expense Net income 50,160 5,340 230 5,110 5. Prepare a balance sheet as of June 30. Answer is complete but not entirely correct. Shilow Company Balance Sheet Current assets: Cash Account receivable Inventory June 30 Assets S 4,910 ( 36,000 28,800 Total net neente RQ 710 Total current assets 69,710 Building and equipment-net 118,800 Total assets S 188,510 Liabilities and Stockholders' Equity Account payable S 21,150 Stockholders' equity: Common stock Retained earnings S 150,000 17,360 Total liabilities and stockholders' equity, 167,360 $ 188,510