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 $ 8,500 $ 24,000 $ 45,600 $ 121,200 $ 27,300 $ 150,000 $ 22,000 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 60,000 $ 76,000 $ 81,000 $ 106,000 $ 57,000 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. $3,300 per month; other expenses (excluding depreciation). 6% of sales. Assume that these expenses are paid monthly. Depreciation is $909 per month (includes depreciation on new assets). 9. Equipment costing $2,500 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 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May Jung Quarter Cash sales $ 45,600 Credit sales 24,000 Total collections $ 69,600 Raine Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Quarter Merchandise Purchases Budget April May Juno Budgeted cost of goods sold $ 57,000 $ 60,750 Add desired ending merchandise inventory 48,600 Total needs 105,600 Less beginning merchandise inventory 45,600 Required purchases $ 60,000 Budgeted cost of goods sold for April = $76,000 sales * 75% = $57,000. Add desired ending inventory for April = $60,750 * 80% - $48,600. Schedule of Expected Cash Disbursements--Merchandise Purchases April May June March purchases $ 27,300 April purchases 30,000 30,000 May purchases June purchases Total disbursements Quarter $ 27,300 60,000 Required 1 Required 2 Required 3 PELELE Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and Interest should be indicated by a minus sign.) June Quarter Shllow Company Cash Budget April May $ 8,500 69,600 78,100 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance 57,300 16,980 2,500 76,780 1,320 Shllow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Selling and administrative expenses: Required ar Shllow Company Balance Sheet June 30 Assets Current assets: Total current assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: Total liabilities and stockholders' equity