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 $ 7,100 $ 18,400 37,200 $ $122,400 $ 22,050 $ 150,000 $ 13,050 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 46,000 $ 62,000 $ 67,000 $ 92,000 $ 43,000 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, $1,900 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $918 per month (includes depreciation on new assets). g. Equipment costing $1,100 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 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 Cash sales April $ 37,200 May June Quarter Credit sales 18,400 Total collections $55,600 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 m Merchandise Purchases Budget April Budgeted cost of goods sold May $46,500 $50,250 June Quarter Add desired ending merchandise inventory Total needs 40,200 86,700 Less beginning merchandise inventory Required purchases Budgeted cost of goods sold for April = $62,000 sales x 75% = $46,500. Add desired ending inventory for April = $50,250 x 80% = $40,200. Schedule of Expected Cash Disbursements-Merchandise Purchases 37,200 $ 49,500 March purchases April purchases May purchases April $ 22,050 May June Quarter $ 22,050 24,750 24,750 49,500 June purchases Total disbursements < Required 1 Required 3 > Complete this question by entering your answers in the tabs below. 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.) Shilow Company Cash Budget April May June Quarter Beginning cash balance $ 7,100 Add collections from customers 55,600 Total cash available 62,700 Less cash disbursements: For inventory 46,800 For expenses 13,060 For equipment 1,100 Total cash disbursements 60,960 Excess (deficiency) of cash 1,740 available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance Cost of goods sold: Shilow Company Income Statement For the Quarter Ended June 30 Selling and administrative expenses: < Required 3 Red Complete this question by entering your answers in the tabs below. 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 Assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity < Required 4 Required 5