The following data relate to the operations of Soper Company, a wholesale distributor of consumer goods as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common shares Retained earnings $ 8,000 20,000 36,000 120,000 21,750 150,000 12,250 a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows: March (actual) April May June $50,000 $60,000 $72,000 $90,000 $48,000 July 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 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. 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 May June $ 36,000 Quarter Cash sales Credit sales* 20,000 Total collections $ 56,000 *40% of prior month's sales 2-a. Merchandise purchases budget : April May June Quarter Budgeted cost of goods sold* $ 45,000 $ 54,000 Add desired ending inventoryt 43,200 Total needs $ 88,200 Less beginning inventory 36,000 Required purchases 52,200 *For April sales: $60,000 sales x 75% cost ratio = $45,000. $54,000 x 80% = $43,200. 2-b. Schedule of expected cash disbursements for merchandise purchases: May June Quarter April $ 21,750 26,100 $ 21,750 52,200 26,100 For March purchases For April purchases For May purchases For June purchases Total cash disbursements for purchases $ 47,850 3. Schedule of expected cash disbursements for selling and administrative expenses: May June Quarter Commissions April $ 7,200 2,500 Rent Other expenses 3,600 Total disbursements 13,300 4. Cash budget: (Round your intermediate calculations and final answers to the nearest whole dollar. Also, round up your interest calculations to the next whole dollar amount. Cash deficiency, repayments and interest should be indicated by a minus sign.) April May June Quarter Cash Budget Cash balance, beginning $ 8,000 $ 8,000 56,000 Add cash collections Total cash available 64,000 Less cash disbursements: For inventory 47,850 For expenses 13,300 1,500 62,650 1,350 For equipment Total cash disbursements Excess (deficiency) of cash Financing Borrowings Repayments Interest Total financing Cash balance, ending 5. Prepare an absorption costing income statement for the quarter ending June 30. SOPER COMPANY Income Statement For the Quarter Ended June 30 Cost of goods sold