The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods Current assets as of March 31 Cash $ 8,100 $22,400 $ 43,200 $129,600 $ 25,800 $ 150,0ee $ 27,500 Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data March (actual) April May June $ 56,000 $ 72,000 $ 77,000 $ 102,000 $53,000 Lu 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 f. Monthly expenses are as follows: commissions, 12% of sales, rent, $2,900 per month; other expenses (excluding depreciation), 6% g. Equipment costing $2,100 wll be purchased for cash in April accounts payable at March 31 are the result of March purchases of inventory of sales. Assume that these expenses are paid monthly. Depreciation is $972 per month (includes depreciation on new assets) 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 4Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April $43,200 22,400 $65,600 June Quarter May Cash sales Credit sales Total collections Required 1Required 2Required 3 Required 4 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchan Merchandise Purchases Budget April $54,000$57,750 May June Quarter Budgeted cost of goods sold Add desired ending merchandise inventory Total needs Less beginning merchandise inventory Required purchases Budgeted cost of goods sold for April : $72,000 sales x 75% : $54,000 Add desired ending inventory for April : $57,750 x 80%-S46200 46,200 100,200 43,200 $57,000 Schedule of Expected Cash Disbursements-Merchandise Purchases April $ 25,800 May June Quarter $ 25,800 March purchases April purchases May purchases June purchases Total disbursements 28,50028,500 57,000 Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated bya Shilow Company Cash Budget April May Quarter June S 8,100 65,600 73,700 Beginning cash balance Add collections from customers Total cash available Less cash disbursements 54,300 15,860 2,100 72,260 1,440 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 Required 1 Required 2 Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ended June 30. Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold Selling and administrative expenses: Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a balance sheet as of June 30 Shilow Company Balance Sheet June 30 Assets Current assets Total current assets Total assets Liabilities and Stockholders' Equity Stockholders' equity Total liabilities and stockholders' equity