The following data relate to the operations of Soper Company, a wholesale distributor of consumer goods as of March 31:

Cash	$	8,000
Accounts receivable		20,000
Inventory		36,000
Building and equipment, net		120,000
Accounts payable		21,750
Common shares		150,000
Retained earnings		12,250

a.	The gross margin is 25% of sales.
b.	Actual and budgeted sales data are as follows:

March (actual)

$

50,000

April

$

60,000

May

$

72,000

June

$

90,000

July

$

48,000

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 months ending inventory should equal 80% of the following months budgeted cost of goods sold.
e.	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.
f.	Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets).
g.	Equipment costing $1,500 will be purchased for cash in April.
h.	The company must maintain a minimum cash balance of $4,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month. The monthly interest rate is 1%. Interest must be paid at the end of each month based on the total loans outstanding for that month.

Required. Using the data above, complete the following statements and schedules for the second quarter 1. Schedule of expected cash collections Schedule of Expected Cash Collections April $ 36,000 May June Quarter Cash sales Credit sales Total collections 40% of prior month's sales 20,000 $ 56,000 2-a. Merchandise purchases budget April $ 45,000$ 54,000 May June Quarter Budgeted cost of goods sold* Add desired ending inventoryt Total needs Less beginning inventory Required purchases 43,200 $ 88,200 36,000 $ 52,200 *For April sales: $60,000 sales x 75% cost ratio-$45,000 t$54,000 x 80%-$43,200 2-b. Schedule of expected cash disbursements for merchandise purchases April $ 21,750 May June Quarter For March purchases For April purchases For May purchases For June purchases Total cash disbursements for purchases $ 21,750 26,100 26,100 52,200 $ 47,850