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 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 57,000 $ 73,000 $ 78,000 $103,000 $ 54,000 $ 8,200 $ 22,800 $ 43,800 $ 128,400 $ 26,175 $ 150,000 $ 27,025 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, $3,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $963 per month (includes depreciation on new assets). g. Equipment costing $2,200 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 dn absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30. ok Complete this question by entering your answers in the tabs below. ] Required 1 Required 2 Required 3 Required 4 Required 5 ences Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Quarter Cash sales $ 43,800 $ 46,800 $ 61,800 $ 152,400 Credit sales 22,800 29,200 Total collections $ 66,600 $ 76,000 31,200 $93,000 83,200 $235,600 Required 1 Required 2 Required 3 Required 4 Required 5 25 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchase Budgeted cost of goods sold Merchandise Purchases Budget Add desired ending merchandise inventory Total needs Less beginning me...andise inventory Required purchases Budgeted cost of goods sold for April Add desired ending inventory for April April May June Quarter $ 54,750 $ 58,500 $ 73,125 $186,375 46,800 58,500 31,200 136,500 101,550 117,000 104,325 322,875 43,800 46,800 58,500 149,100 $ 57,750 $ 70,200 $ 45,825 $ 173,775 $73,000 sales x 75% $54,750. $58,500 x 80% $46,800. Schedule of Expected Cash Disbursements-Merchandise Purchases March purchases April purchases May purchases April May June Quarter $ 26,175 $ 26,175 28,875 28,875 57,750 35,100 35,100 70,200 22,913 22,913 June purchases Total disbursements $ 55,050 $ 63,975 $ 58,013 $177,038 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory Shilow Company Cash Budget April May June Quarter $ 8,200 $ 4,410 $ 6,395 $ 8,200 66,600 76,000 93,000 283,600 74,800 80,410 99,395 291,800 55,050 63,975 58,013 177,038 For expenses 16,140 17,040 21,540 54,720 For equipment 2,200 2,200 Total cash disbursements 73,390 81,015 79,553 233,958 Excess (deficiency) of cash available over disbursements 1,410 (605) 19,842 57,842 Financing: Borrowings Repayments Interest Total financing Ending cash balance 3,000 7,000 10,000 (10,000) (10,000) (230) (230) 3,000 7,000 (10,230) (230) $