The following data relate to the operations of Shllow Company, a wholesale distributor of consumer goods: Curront annot as of March 311 Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 8.000 $ 22,000 542,600 $ 130,800 $ 25,425 $ 150,000 $ 27,975 ices a. The gross margin is 25% of sales b. Actual and budgeted sales dates March (actual) April May June July $ 55.000 $ 21,000 $ 76,000 5101,000 $ 52,000 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at Marc 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. TH accounts payable at March 31 are the result of March purchases of Inventory, 1. Monthly expenses are as follows: commissions, 12% of sales; rent, $2.800 per month other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $981 per month (includes depreciation on new assets), g. Equipment costing $2,000 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 g. Equipment costing $2,000 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 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections Schedule of Expected Cash Collections May June Quarter Cash sales $ 42,600 Credit sales 22.000 Total collections $ 64,600 $ 05 0 $ 0 April Regund Required 2 > Complete this question by entering your answers in the tabs below. 0 Required 1 Required 2 Required 3 Required 4 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold $53,250 $57.000 Add desired ending merchandise inventory 45,600 Total needs 98,850 57,000 0 Less beginning merchandise inventory 42,600 Required purchases 556,250 $57,000 $ 0 $ 0 Budgeted cost of goods sold for April = $71,000 sales * 75% = $53,250 Add desired ending inventory for April $57,000 X 80% = $45,600 Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 25,425 $ 25425 April purchases 28.125 28,125 56.250 May purchases June purchases Total disbursements $ 53,550 $28.125 5 o$ 81.675 Required 1 Required 2 Required 3 Required 4 Required 5 0 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Shilow Company Cash Budget April May June Quarter Beginning cash balance $ 8,000 Add collections from customers 64,600 Total cash available 72,600 0 0 Less cash disbursements: For inventory 53,550 For expenses 15,580 For equipment 2.000 Total cash disbursements 71,130 0 Excess (deficiency of cash 0 1.470 0 available over disbursements Financing Borrowings Repayments Interest Total financing 0 0 0 Ending cash balance $ 1.470 $ $ $ 0 0 0 0 0 Required 2 Required 4 > Required 3 Required 1 Required 2 Required 4 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: 0 0 0 Selling and administrative expenses 0 0 0 Required 3 Required 5 > Required 1 Required 2 Required 3 Required 4 Required 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 0 0 Total liabilities and stockholders' equity $