The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods Current assets as of March 31: Cash $8,700 $ 24,800 $ 46,800 116,400 $ 28,050 $ 150,000 18,650 Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings a. ne gross margin is 25% of Sales b. Actual and budgeted sales data March (actual) April May June July $ 62,000 $ 78,000 $83,000 $ 108,000 $ 59,000 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 f. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,500 per month; other expenses (excluding depreciation), 6% g. Equipment costing $2,700 will 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 $873 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 1Required 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April $46,800 24,800 $71,600 S May June Quarter Cash sales Credit sales Total collections Required Required 2 Merchandise Purchases Budget May June Quarter April $ 58,500 $62,250 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-378,000 sales 75% = $58,500 Add desired ending inventory for April-$62,250 80%-$49,800 49,800 108,300 62,250 0 0 46,800 $61,500 $62,250$ Schedule of Expected Cash Disbursements-Merchandise Purchases April $ 28,050 May June Quarter $ 28,050 March purchases April purchases May purchases June purchases Total disbursements 30,750 30,750 61,500 $ 58,800 $30,750$ 0 $ 89,550 Required 1 Required 3 Cash Budget ri $ 8,700 71,600 80,300 May June Quarter Beginning cash balance Add collections from customers Total cash available Less cash disbursements: 58,800 17,540 2,700 79,040 1,260 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 $1,260$ Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: 0 0 0 Selling and administrative expenses: Shilow Company Balance Sheet June 30 Assets Current assets: Total current assets 0 Total assets 0 Liabilities and Stockholders' Equity Liabilities and Stockholders' Equity Stockholders' equity: 0 Total liabilities and stockholders' equity 0