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 Accounts receivable Inventory S Building and equipment, net Accounts payable 129,600 $ 25,800 150,000 27,500 Common stock Retained earnings a. The gross margin is 25% of sales b. Actual and budgeted sales data: March (actual) April 56,000 $ 72,000 $ 77,000 ay $102,000 $ 53,000 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, $2,900 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $972 per month (includes depreciation on new assets) g. Equipment costing $2,100 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 4 Required 5 Required 2 Required 3 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Quarter Cash sales $43,200 Credit sales 22,400 $ 65,600 Total collections Required 4 Required 1 Required 2 Required 3 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Merchandise Purchases Budget April May June Quarter S $54,000 Budgeted cost of goods sold 57,750 Add desired ending merchandise inventory 46,200 Total needs 100,200 Less beginning merchandise inventory 43,200 $57,000 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% $46,200 Schedule of Expected Cash Disbursements-Merchandise Purchases April May Quarter June March purchases $ 25,800 S 25,800 April purchases 28,500 28,500 57,000 May purchases June purchases Total disbursements Required 1 Required 2 Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be ind icated by a minus sign.) Shilow Company Cash Budget Quarter April May June Beginning cash balance S 8,100 65,600 Add collections from customers Total cash available 73,700 Less cash disbursements: 54,300 For inventory For expenses 15,860 For equipment 2,100 Total cash disbursements 72,260 Excess (deficiency) of cash available over disbursements 1,440 Financing: Borrowings Repayments Interest Total financing Ending cash balance Required 3 Required 4 Required 1 Required 2 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 4 Required 1 Required 2 Required 3 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