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

Current assets as of March 31:
Cash	$	7,800
Accounts receivable	$	21,200
Inventory	$	41,400
Building and equipment, net	$	130,800
Accounts payable	$	24,675
Common stock	$	150,000
Retained earnings	$	26,525

The gross margin is 25% of sales.

Actual and budgeted sales data:

March (actual)	$	53,000
April	$	69,000
May	$	74,000
June	$	99,000
July	$	50,000

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.

Each months ending inventory should equal 80% of the following months budgeted cost of goods sold.

One-half of a months 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.

Monthly expenses are as follows: commissions, 12% of sales; rent, $2,600 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $981 per month (includes depreciation on new assets).

Equipment costing $1,800 will be purchased for cash in April.

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.

1. Complete the following schedule:

2. Complete the following:

3. Complete the following cash budget:

Required 1

Schedule of Expected Cash Collections
	April	May	June	Quarter
Cash sales	$41,400
Credit sales	21,200
Total collections	$62,600

Required 2

Merchandise Purchases Budget
	April	May	June	Quarter
Budgeted cost of goods sold	$51,750	$55,500
Add desired ending merchandise inventory	44,400
Total needs	96,150
Less beginning merchandise inventory	41,400
Required purchases	$54,750
Budgeted cost of goods sold for April = $69,000 sales 75% = $51,750.
Add desired ending inventory for April = $55,500 80% = $44,400.
Schedule of Expected Cash DisbursementsMerchandise Purchases
	April	May	June	Quarter
March purchases	$24,675			$24,675
April purchases	27,375	27,375		54,750
May purchases
June purchases
Total disbursements

Required 3

Complete the following cash budget: (Cash deficiency, repayments and interest should be indicated by a minus sign.)