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

Current assets as of March 31:Cash$7,000

Accounts receivable$18,000

Inventory$36,600

Building and equipment, net$121,200

Accounts payable$21,675

Common stock$150,000

Retained earnings$11,125

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

March (actual)$45,000April$61,000May$66,000June$91,000July$42,000

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, $1,800 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).
5. Equipment costing $1,000 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 following schedule:

2. Complete the following:

3. Complete the following cash budget:

4. An absorption costing income statement for the quarter ended June 30.

5. A balance sheet as of June 30.

Ch 8: Hand-In Problem 0 Saved Help Save 5 Exit Submit The followlng data relate to the operations ofShilow Company, a wholesale dlstrlbutor of consumer goods: 13 Current assets as of March 31: Cash $ 7 , 000 \"1"\" Accounts receivable a 19,000 Inventcry 3 35,500 MW\" Building and equipment, not a 121,200 Account-.5 payable 3 21,675 Common stock 3 150,000 _ Retained earnings $ 11,125 E . Prlnl If. a. The gross margln is 25% of sales. newsman b. Actual and budgeted sales data: March (actual) 3 45,000 April 3 61,000 May 9 66,000 June a 91,000 July 3 42,000 ' c. Sales are 60% for cash and 40% on credit Credit sales are oollected in the month following sale. The acoounts receivable at March 31 are a result of March credlt sales. d. Each month's ending inventory should equal 80% ofthe following month's budgeted oost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other half ls 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: commlssions, 12% of sales: rent, $1,300 per month: other expenses (excluding depreclationl, 6% of sales. Assume that these expenses are paid monthly. Depreciation ls $909 per month [includes depreciation on new assets]. 9. Equipment costlng $1.000 wlll be purchased for cash in April. h. Management would llke to malntain a minimum cash balance ofat 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 beginnlng of each month, up to a total loan balance of $20900. The interest rate on these loans is 1'36 per month and for slmpliclty we wlll assume that interest is not Mr. \"\"7 6 C ii Secure https:Iawoonnact.mheducation.cumlflowlconnect.l'llml'?isReg:true&returnUrl:https%3A%2F%2Fconnect.r'nhaducation.com%2Fpaemweb%2i=irldax.htmi%23%2Fragistr... o- l a E Ch 8: Hand-In Problem 6 Saved Help Saves. Exit Submit w h. Management would like to maintain a minimum cash balance ofat least $4.000 at the end ofeach 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. 13 points Required: Uslng the preceding data: skipped 1. Complete the following schedule: 2. Complete the following: 6 3. Complete the following cash budget: Wm 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a halanoe sheet as ofJune 30. References complete this qua-Hon by enteran your amen In the tub: below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the following schedule: Cash sales Credit sales 18,000 Total collections $ 54,600 S o $ 0 $ 0 M: 5\"\" ( Rm: 3 0f 5 Mm > Hlll ' Ch 8: Hand-In Problem 6 5am Help Save a an Submit w 3 Complete this questlon lily enterlng your amen: In the tabs below. 13 Required 1 Required 2 Required 3 Required 4 Required 5 palms Complete the following: skipped Pm Budgeted ms! m goods sold $45,750 References Add desired ending merchandise inventory 39,600 Total needs 85,350 40,500 0 0 LEE beginning merchandise inventory 35,600 CC: Required purchases $48,750 $40,500 $ 0 $ 0 Budgeted cost 01 goods sold For April = $61,000 sales at 75% = $45,750. Add desired ending inventorylor April = 549,500 x 80% = $39,600. March purchases $21,675 $ 21,675 April purchases 24,375 May purchases Junepurchases Totaldisbureen'lenls $46,050 $24,315 5 0 $ 70,425 { Heaulr-d1 -eulr-da > ( mew 3of6 Mm) Ch 3: Hand-In Problem 0 Saved 3 Required 1 Required 2 Complete the following ash budget: (Cash deciency, repayments and Interest should be Indicated by a minus sign.) 13 points supp-d Beginning cash balance Required 3 Required 4 Required 5 Help Prim Add cclleoiions from customers References Total cash available 51,500 Less cash disbursements: For inventory 46,050 For expenses 12,730 For equipment 1.000 Total cash disbursements 59,830 Excess (deciency) of cash available over disbursemanis 1.770 Financing: Interest Bonowings Repayments Total nancing Ending cash balance Save 8. Eli! Submit w Ch 8: Hand-In Problem 0 Saved Help Save]. Exit Submit w 3 Prepare an absorption ousting lnmrne statement for the quarter ended June 30. 13 poms Slapped Prl m References