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 $ 8,700 $ 24,800 $ 46,800 $ 116,400 $ 28,050 $ 150,000 $ 18,650 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 62,000 $ 78,000 $ 83,000 $ 108,000 $ 59,000 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 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, $3,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $873 per month (includes depreciation on new assets). g. Equipment costing $2,700 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. 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 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Quarter Cash sales Credit sales $ 46,800 24,800 Total collections $ 71,600 Required 1 Required 2 > Required 1 Required 2 Required 3 Required 4 Required 5 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 $ 58,500 $ 62,250 Add desired ending merchandise inventory 49,800 Total needs 108,300 Less beginning merchandise inventory 46,800 Required purchases 61,500 Budgeted cost of goods sold for April = $78,000 sales 75% = $58,500. Add desired ending inventory for April = $62,250 80% = $49,800. Schedule of Expected Cash DisbursementsMerchandise Purchases March purchases April purchases May purchases June purchases April May $ 28,050 30,750 30,750 June Quarter $ 28,050 61,500 Total disbursements < Required 1 Required 3 > Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Shilow Company Cash Budget April May June Quarter $ 8,700 71,600 80,300 Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance 58,800 17,540 2,700 79,040 1,260 Required 1 Required 2 Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ended June 30. Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Selling and administrative expenses: Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a balance sheet as of June 30. Shilow Company Balance Sheet June 30 Current assets: Total current assets Total assets Stockholders' equity: Assets Liabilities and Stockholders' Equity Total liabilities and stockholders' equity