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

Cash: $8,000

Accounts Receivable: $20,000

Inventory: $36,000

Building & Equipment, net: $120,000

Accounts Payable: $21,750

Common Stock: $150,000

Retained Earnings: $12,250

The gross margin is 25% of sales.

Actual and budgeted sales data: March (actual): $50,000, April: $60,000, May: $72,000, June: $90,000, July $48,000

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 month's ending inventory should equal 80% of the following month's budgeted cost of goods sold.

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.

Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets).

Equipment costing $1,500 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.

Using the data provided above, use the Excel Template (below) provided to prepare the following budget schedules: Sales Budget (Merely enter the sales data provided.); Schedule of Expected Cash Collections; Merchandise Purchases Budget; Schedule of Expected Cash Disbursements - Merchandise Purchases; Schedule of Expected Cash Disbursements - Selling and Administrative Expenses; Cash Budget

Here is the template that needs to be filled in (anything that has a question mark in place of a value needs to be filled in):

Budgeted Sales

March April May June July

? ? ? ? ?

Schedule of Expected Cash Collections

April May June Quarter

Cash Sales $36000 ? ? ?

Credit Sales $20000 ? ? ?

Total Collections $56000 ? ? ?

Merchandise Purchases Budget

Apr May June Qtr.

Budgeted Cogs 45000 ? ? ?

Add: desired end inventory 43200 ? ? ?

Total needs 88200 ? ? ?

Less: beginning inventory 36000 ? ? ?

Required Purchases 52200 ? ? ?

Schedule of expected cash disbursements-- Merchandise purchases

April May June Quarter

March purchases 21750 ? ? 21750

April purchases 26100 26100 ? 52200

May purchases ? ? ? ?

June purchases ? ? ? ?

Total Disbursements 47850 ? ? ?

Schedule of expected cash disbursements- selling & administrative

April May June Quarter

Commissions 7200 ? ? ?

Rent 2500 ? ? ?

Other expenses 3600 ? ? ?

Total disbursements 13300 ? ? ?

Cash Budget

April May June Quarter

Cash Balance Beginning 8000 ? ? ?

Add: Cash Collections 56000 ? ? ?

Total cash available 64000 ? ? ?

Less Cash Disbursements

For Inventory 47850 ? ? ?

For expenses 13300 ? ? ?

For Equipment 1500 ? ? ?

Total Cash Disbursements 62650 ? ? ?

Excess of cash 1350 ? ? ?

Borrowing ? ? ? ?

Repayments ? ? ? ?

Interest Paid ? ? ? ?

Ending Cash Balance ? ? ? ?