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 $120,000 $ Building and equipment, net Accounts payable 21,750 $150,000 12,250 Common stock Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April $ 50,000 $ 60,000 May 72,000 90,000 $ 48,000 June 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. 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 $900 per month (includes depreciation on new assets). g. Equipment costing $1,500 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. 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 1 Required 3 Required 4 Required 5 Required 2 Complete the schedule of expected cash collections Schedule of Expected Cash Collections April May June Quarter Cash sales Credit sales Total collections $ 36,000 $72,000 90,000 48,000 20,000 $ 56,000 $72,000 $ 90,000 $ 48,000 Required 1 Required 2 Required 4 Required 5 Required 1 Required 2 Required 3 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. mercna e sche Merchandise Purchases Budget | April May June Quarter $ 54,000 Budgeted cost of goods sold Add desired ending merchandise inventory Total needs 45,000 43,200 88,200 54,000 Less beginning merchandise inventory 36,000 $ 52,200 Required purchases $ 54,000 0 Budgeted cost of goods sold for April $60,000 sales x 75% = $45,000. Add desired ending inventory for April $54,000 x 80% = $43,200 Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter $21,750 March purchases $21,750 $ 26,100 April purchases 26,100 52,200 May purchases June purchases Total disbursements $ 47,850 $ 26,100 $73,950 Required 1 Required 3 Complete the cash budget. (Cash deficiency, repaymente and interest should be indicated by a minus sign.) Shilow Company Cash Budget May Quarter April June Beginning cash balance 8,000 Add collections from customers 56,000 Total cash available 64,000 0 0 0 Less cash disbursements: For inventory 47,850 For expenses 13,300 For equipment 1,500 Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: 62,650 0 0 0 1,350 0 0 0 Borrowings Repayments Interest Total financing 0 0 0 Ending cash balance $ $ 1,350 0 0 0 Required 2 Required 4 Prepare a balance sheet as of June 30 Shilow Company Balance Sheet June 30 Assets Current assets: Total current assets 0 0 Total assets Liabilities and Stockholders' Equity Stockholders' equity 0 Total liabilities and stockholders' equity Reauired A