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 $ 8,500 $ 24,000 $ 45,600 $ 121,200 $ 27,300 $ 150,000 $ 22,000 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June $ 60,000 $ 76,000 $ 81,000 $ 106,000 July $ 57,000 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. 1. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,300 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $909 per month (includes depreciation on new assets). g. Equipment costing $2,500 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. h. 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. Return to question April May June Quarter Beginning cash balance $ 8,500 $ 4,320) $ 4,565 $ 8,500 Add collections from customers 69,600 79,000 96,000 244,600 Total cash available 78,100 83,320 100,565 253,100 Less cash disbursements: For inventory 57,300 67,875 62,925 188,100 For expenses 16,980 17,880 22.380 57,240 For equipment 2,500 00 2,500 ( Total cash disbursements 76,780 85,755 85,305 247,840- Excess (deficiency) of cash available over disbursements 1,320 (2,435) 15,260 5,260 Financing Borrowings Repayments 3,000 7,000 O 10,000 00 0(10,000) (10,000) Interest 00 00 (130) 0 X Total financing 3,000 7,000 (10,130) 0 Ending cash balance 4,320 $ 4,565 $ 5,130 $ 5,260 Required 2 Required 4 > Shilow Company Income Statement For the Quarter Ended June 30 Sales $263,000 Cost of goods sold: Beginning inventory 197,250x Goods available for sale 197,250 197,250 65,750 Selling and administrative expenses: 0 65,750 Assets Current assets: Total current assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: 0 0 0 Total liabilities and stockholders' anuity 0