The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 9,400 Accounts receivable $ 27.600 Inventory $ 51,800 Building and equipment, net 599,600 Accounts payable $ 30,675 Common stock $ 150,000 Retained earnings 5.6,925 a The gross margin is 25% of sales b. Actual and budgeted sales data: March (actual April May June $ 69,000 $ 85,000 590,000 $ 115,000 $ 66,000 July 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 $4.200 per month other expenses (excluding depreciation) 69 of sales Assume that these expenses are paid monthly Depreciation is $747 per month (includes depreciation on new assets) g Equipment costing $3.400 will be purchased for cash in April h Management would like to maintain a minimum cash balance of at least 54.000 at the end of each month The company has an agreement with a local bank that allows the company to borrow in increments of $1000 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: 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 10 $ 290,000 Income Statement For the Quarter Ended June 30 Sales Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Gross margin Selling and administrative expenses Commissions Rent Depreciation 0 0 290,000 0 290 000 Other expenses Net operating income interest expense Not Income 290 000 IU Shilow Company Balance Sheet June 30 Assets Current assets Cash Accounts receivable Inventory 4.350 46.000 39,600 Total current assets Building and equipment-net Total assets Liabilities and Stockholders' Equity Accounts payable 89.950 100.759 190.709 S $ 28 425 Stockholders' equity Common stock Retained earnings 5 150,000 12.284