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 $ 7,700 $ 20,800 $ 40,800 $ 129,600 $ 24,300 $ 150,000 $ 24,600 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 52,000 $ 68,000 $ 73,000 $ 98,000 $ 49,000 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, $2,500 per month other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly, Depreciation is $972 per month (includes depreciation on new assets). g. Equipment costing $1700 will be purchased for cash in April. h Mananement would like to maintain a minimum rach halanre of at least 4000 at the end of each month The company has an Proy 1 Next 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 $2,500 per month other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly Depreciation is $972 per month (includes depreciation on new assets) g. Equipment costing $1,700 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 onces 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 5 Required Required 2 Required) Required* Prepare a balance sheet as of June 30. Shilaw Company Balance Sheet June 30 Assets Shilow Company Income Statement For the Quarter Ended June 30 Sales $ 239,000 Cost of goods sold: Beginning inventory Purchases 40,800 167,850 Goods available for sale 208,650 29,400 179,250 59,750 Ending inventory Gross margin Selling and administrative expenses: Commissions 28,680 Rent 7,500 Other expenses 14,340 2,916 Depreciation Other expenses 53,436 Net operating income 6,314 Interest expense 210 Net income 6,104 Prepare a balance sheet as of June 30. Shilow Company Balance Sheet June 30 Assets Current assets: Inventory Total current assets Building and equipment-net Total assets Liabilities and Stockholders' Equity 74,370 74,370 128,384 $ 202,754 22,050 Accounts payable Stockholders' equity: Common stock Retained earnings $ 150,000 30,754 180,754 $ 202,804 Total liabilities and stockholders' equity