The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:

Current assets as of March 31:
Cash	$ 8,800
Accounts receivable	$ 25,200
Inventory	$ 47,400
Building and equipment, net	$ 114,000
Accounts payable	$ 28,425
Common stock	$ 150,000
Retained earnings	$ 16,975

1. The gross margin is 25% of sales.
2. Actual and budgeted sales data:

March (actual)	$ 63,000
April	$ 79,000
May	$ 84,000
June	$ 109,000
July	$ 60,000

1. 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.
2. Each months ending inventory should equal 80% of the following months budgeted cost of goods sold.
3. One-half of a months 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.
4. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,600 per month; other expenses (excluding depreciation), 6% of sales. Assume these expenses are paid monthly. Depreciation is $855 per month (includes depreciation on new assets).
5. Equipment costing $2,800 will be purchased for cash in April.
6. 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 allowing it 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 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
9. r.

? Complete the schedule of expected cash collections. Complete the cash budget. Note: Cash deficiency, repayments and interest should be indicated by a minus sign. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline \multicolumn{8}{|c|}{ Merchandise Purchases Budget } \\ \hline & & April & & May & & June & Quarter \\ \hline Budgeted cost of goods sold & $ & 59,250 & $ & 63,000 & $ & 81,750 & $204,000 \\ \hline Add desired ending merchandise inventory & & 50,400 & & 65,400 & & 36,000 & 36,000 \\ \hline Total needs & & 109,650 & & 128,400 & & 117,750 & 240,000 \\ \hline Less beginning merchandise inventory & & 47,400 & & 50,400 & & 65,400 & 47,400 \\ \hline Required purchases & $ & 62,250 & $ & 78,000 & $ & 52,350 & $192,600 \\ \hline \multicolumn{8}{|c|}{ Budgeted cost of goods sold for April =$79,000 sales 75%=$59,250. } \\ \hline \multicolumn{8}{|c|}{ Add desired ending inventory for April =$63,00080%=$50,400. } \\ \hline \multicolumn{8}{|c|}{ Schedule of Expected Cash Disbursements-Merchandise Purchases } \\ \hline & & April & & May & & June & Quarter \\ \hline March purchases & $ & 28,425 & $ & 00 & $ & 0 & $28,425 \\ \hline April purchases & & 31,125 & & 31,125 & & 0 & 62,250 \\ \hline May purchases & & 0 & & 39,000 & & 39,000 & 78,000 \\ \hline June purchases & & 0 & & 00 & & 26,175 & 26,175 \\ \hline Total disbursements & $ & 59,550 & $ & 70,125 & $ & 65,175 & $194,850 \\ \hline \end{tabular} Prepare a balance sheet as of June 30 . \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Shilow Company } \\ \hline \multicolumn{5}{|c|}{ Balance Sheet } \\ \hline \multicolumn{5}{|c|}{ June 30} \\ \hline \multicolumn{5}{|c|}{ Assets } \\ \hline \multicolumn{5}{|l|}{ Current assets: } \\ \hline Cash & 2 & & $ & 4,760 \\ \hline Accounts receivable & & & & 43,600 \\ \hline \multirow[t]{3}{*}{ Inventory } & 2 & & & 36,000 \\ \hline & & & & 02 \\ \hline & & & & 0 \\ \hline Total current assets & & & & 84,360 \\ \hline Building and equipment-net & & & & 0 \\ \hline Total assets & & & $ & 84,360 \\ \hline \multicolumn{5}{|c|}{ Liabilities and Stockholders' Equity } \\ \hline \multirow[t]{2}{*}{ Accounts payable } & 2 & & $ & 26,175 \\ \hline & & & & 0 \\ \hline \multicolumn{5}{|l|}{ Stockholders' equity: } \\ \hline Common stock & 2$ & 150,000 & & \\ \hline \multirow[t]{3}{*}{ Retained earnings } & ( & 22,420 & & \\ \hline & & 02 & & \\ \hline & & 0 & & 172,420 \\ \hline \multicolumn{2}{|c|}{ Total liabilities and stockholders' equity } & & \multicolumn{2}{|c|}{$198,595} \\ \hline \end{tabular}