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

Current assets as of March 31:Cash$7,800

Accounts receivable$21,200

Inventory$41,400

Building and equipment, net$130,800

Accounts payable$24,675

Common stock$150,000

Retained earnings$26,525

1. The gross margin is 25% of sales.
2. Actual and budgeted sales data:

March (actual)$53,000April$69,000May$74,000June$99,000July$50,000

1. 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.
2. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold.
3. 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.
4. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,600 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $981 per month (includes depreciation on new assets).
5. Equipment costing $1,800 will be purchased for cash in April.
6. 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. Do an absorption costing income statement for the quarter ended June 30.

5. Do a balance sheet as of June 30.

Module 6: Problems i Saved Help Save & Exit Submit Check my work 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. 12.5 points Complete this question by entering your answers in the tabs below. eBook Print Required 1 Required 2 Required 3 Required 4 Required 5 References Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Quarter Cash sales $ 41,400 Credit sales 21,200 Total collections $ 62,600 $ o $ 0 $ 0 Check my work Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 12.5 points Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Merchandise Purchases Budget eBook April May June Quarter Print Budgeted cost of goods sold $ 51,750 $55,500 References Add desired ending merchandise inventory 44,400 Total needs 96, 150 55,50 0 Less beginning merchandise inventory 41,400 Required purchases $ 54,750 $55,500 $ o $ 0 Budgeted cost of goods sold for April = $69,000 sales x 75% = $51,750. Add desired ending inventory for April = $55,500 x 80% = $44,400. Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 24,675 $ 24,675 April purchases 27,375 27,375 54,750 May purchases June purchases Total disbursements $ 52,050 $27,375 $ 0 $ 79,425 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 12.5 points Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Shilow Company eBook Cash Budget Print April May June Quarter References Beginning cash balance $ 7,800 Add collections from customers 62,600 Total cash available 70,400 0 0 0 Less cash disbursements: For inventory $2,050 For expenses 15,020 For equipment 1.800 Total cash disbursements 68,870 0 0 0 Excess (deficiency) of cash 1,530 O O available over disbursements Financing Borrowings Repayments Interest Total financing 0 0 0 0 Ending cash balance $ 1,530 $ o $ o $ 0Check my work Required 1 Required 2 Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ended June 30. 12.5 Shilow Company points Income Statement For the Quarter Ended June 30 eBook Print Cost of goods sold: References 0 0 0 Selling and administrative expenses: Module 6: Problems i Saved Help Save & Exit Submit Check my work Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a balance sheet as of June 30. Shilow Company 12.5 points Balance Sheet June 30 Assets eBook Current assets: Print Cash $ 5,660 References Accounts receivable 39,600 Inventory 30,000 Total current assets 75,260 Total assets $ 75,260 Liabilities and Stockholders' Equity Stockholders' equity: Common stock $ 150,000 Retained earnings 32,492 182,492 Total liabilities and stockholders' equity $ 182,492