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

Current assets as of March $31$:

Cash $ $8,000$

Accounts receivable $20,000$

Inventory $36,000$

Buildings and equipment, net $120,000$

Accounts payable $21,750$

Common shares $150,000$

Retained earnings $12,250$

The gross margin is $25\%$ of sales.

Actual and budgeted sales data are as follows:

March $($actual$)$ $ $50,000$

April $ $60,000$

May $ $72,000$

June $ $90,000$

July $ $48,000$

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 the result of March credit sales.

Each month$$s ending inventory should equal $80\%$ of the following month$$s budgeted cost of goods sold.

One$-$half of a month$$s inventory purchases is paid for in the month of purchase; the other one$-$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, $$2,500$; other expenses $($excluding depreciation$),6\%$ of sales. Assume that these expenses are paid monthly. Depreciation is $$900$ per month and includes depreciation on new assets.

Equipment will be acquired for cash: $$1,500$ in April.

Management would like to maintain a minimum cash balance of $$4,000$ at the end of each month. The company has an agreement with a local bank that allows the company to borrow as needed at the beginning of each month, up to a total loan balance of $$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 following:

$1.$ Schedule of expected cash collections:

$2.$ Merchandise purchases budget:

Budgeted cost of goods sold for April $=$ $$60,000$ sales $\backslash$times $75\%=$ $$45,000.$

Add desired ending inventory for April $=$ $$54,000\backslash$times $80\%=$ $$43,200.$

$3.$ Complete the following cash budget: $($Cash deficiency, repayments and interest should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest whole dollar.$)$

$4.$ Prepare an absorption costing income statement for the quarter ended June $30.$

$5.$ Prepare a balance sheet as of June $30.$