The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods Current assets as of March 31 Cash $ 8,600 Accounts receivable $ 24,400 Inventory $ 46,200 Building and equipment, net $ 118,800 Accounts payable $ 27,675 Capital stock $ 150,000 Retained earnings $ 20,325 The gross margin is 25 of sales Actual and budgeted sales data March (actual) $ 61,000 April $ 77,000 May $ 82,000 June $ 107,000 July $ 58,000 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 Each months ending inventory should equal 80 of the following months budgeted cost of goods sold 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 Monthly expenses are as follows commissions, 12 of sales rent, $3,400 per month other expenses (excluding depreciation), 6 of sales Assume that these expenses are paid monthly Depreciation is $891 per month (includes depreciation on new assets) Equipment costing $2,600 will be purchased for cash in April 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 data above 1 Complete the following schedule Schedule of Expected Cash Collections April May June Quarter Cash sales Credit sales Total collections $ 46,200 24,400 $ 70,600 2 Complete the following Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold$ 57,750 Add desired ending inventory Total needs Less beginning inventory Required purchases 49,200 106,950 46,200 $ 60,750 Schedule of Expected Cash Disbursements Merchandise Purchases April May June Quarter March purchases April purchases May purchases June purchases Total disbursements $ 27,675 30,375 $ 27,675 30,375 60,750

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The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 8,600

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


Current assets as of March 31:
Cash	$	8,600
Accounts receivable	$	24,400
Inventory	$	46,200
Building and equipment, net	$	118,800
Accounts payable	$	27,675
Capital stock	$	150,000
Retained earnings	$	20,325

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


March (actual)	$	61,000
April	$	77,000
May	$	82,000
June	$	107,000
July	$	58,000

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.
Each months ending inventory should equal 80% of the following months budgeted cost of goods sold.
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.
Monthly expenses are as follows: commissions, 12% of sales; rent, $3,400 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $891 per month (includes depreciation on new assets).
Equipment costing $2,600 will be purchased for cash in April.
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 data above:

1. Complete the following schedule.

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Schedule of Expected Cash Collections April May June Quarter Cash sales Credit sales Total collections $ 46,200 24,400 $ 70,600 2. Complete the following Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold$ 57,750 Add desired ending inventory Total needs Less beginning inventory Required purchases 49,200 106,950 46,200 $ 60,750 Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases April purchases May purchases June purchases Total disbursements $ 27,675 30,375 $ 27,675 30,375 60,750