The following data relate to the operations of Shilow Company, a wholesale distributor of consurher goods Current assets of March 31 Ca Accounts receivable Inventory Huildings and equipment, net Accounts payable shares Retainings 8.000 20,000 16,000 170,000 21.75 150,000 12,350 a. The gross margin is 25% of sales b. Actual and budgeted sales data are as follows March (actual) $50,000 56,00 572.000 590.000 $45,000 July 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 the 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 eventory purchases is paid for in the month of purchase, the other one-half is paid for in the following month The accounts payable at March are the result of March purchases of inventory 1. Monthly expenses are as follows commissions, 12% of sales rent $2.500 other expenses excluding depreciation of sales Assume that these expenses are paid monthly Depreciation is 5900 per month and includes depreciation on new asset g. Equipment will be acquired for cash: $1,500 in April h Management would like to maintain a minimum cash balance of $4.000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow as needed at the beginning of each month up to a total loan balance of $20,000. The interest rate on these loans is 16 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 Using the preceding data, complete the following: 1. Schedule of expected cash collections: Quarter Cash sales Credit sales Total collections Schedule of Expected Cash Collections April May June $36.000 20,000 $ 56,000 $ 0 $ 0 $ 0 2. Merchandise purchases budget: June Quarter Merchandise Purchases Budget April May Budgeted cost of goods sold $ 45,000 Add desired ending inventory 43 200 Total needs 88,200 Less beginning merchandise inventory 36,000 Required purchases $ 52,200 $ 0 0 0 OS 0 $ 0 Budgeted cost of goods sold for April = $60,000 sales x 75% = $45,000. Add desired ending inventory for April = $54,000 * 80% = $43,200. S Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases s 21,750 $ 21.750 April purchases 26,100 26.100 52 200 May purchases June purchases Total disbursements S 47,850 $ 26,100 $ 0 $ 73 950 3. Complete the following cash budget (Cash deficiency, repayments and interest should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest whole dollar.) Shilow Company Cash Budget May June Quarter $ April 8,000 56 000 64.000 0 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 47 850 13,300 1,500 62650 1.350 0 0 0 0 0 0 $ 13505 OS 0 4. 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 0 0 0 0 Selling and administrative expenses 0 0 0 5. Prepare a balance sheet as of June 30, Shilow Company Balance Sheet June 30 Assets Current assets Total current assets 0 Total assets Liabilities and Stockholders' Equity Stockholders' equity Total liabilities and stockholders' equity 0