The following data relate to the second quarter operations of Leisure Sports, a wholesale distributor of consumer sporting goods, as of March 31 Cash Accounts receivable $5,000 40,000 Inventory 12,600 Building and equipment, set 214,100 Accounts payable 18,300 Common shares 190,000 Retained earnings 75,400 a. Actual sales for March and budgeted sales for April through July are as follows: April March (actual) $60,000 70,000 85,000 90,000 May June July 50,000 b. Sales are 20% cash and 80% credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. c. The company's gross margin is 40% of sales. d. Monthly expenses are as follows: salaries and wages $7,500 per month; shipping, 6% of sales; advertising, $6,000 per month; other expenses, 4% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $6,000 in total for the quarter. e. Each month's ending inventory should equal 30% of the following month's cost of goods sold. 1. 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. 9. Equipment costing $11,500 will be purchased for cash in April and $3,000 will be purchased for cash in May. h. Dividends of $3,500 will be declared and paid in June. 1. The company must maintain a minimum cash balance of $8,000. 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. www be paid at the end of each month based on the total loans outstanding for that montn. Required: Using the data above, complete the following: 1-a. Sales budget: Sales Budget April May 60,000 $ 70,000 $ 56,000 March ok Total sales $ Cash at Credit nces June July 12,000 14,000 $ 48,000 $ 56,000 $ 56,000 $ 0 $ 0 1-b. Schedule of expected cash collections: Schedule of Expected Cash Collections April May June Quarter Cash sales $ 14,000 + Credit sales 48,000 Total collections $ 62,000 $ 0 $ 0 $ 0 2-a. Merchandise purchases budget: April May June Quarter Budgeted cost of goods sold $ 42,000 S 51,000 40 points Add desired ending inventoryt 15,300 Total needs S Less beginning inventory 57,300 $ 51,000 $ 12,600 0 S o Required purchases $ 44,700 $ 51,000 $ 0 $ eBook Print References "For April sales: $70,000 sales x 60% cost ratio tAt April 30: $51,000 30% At June 30: July sales $50,000 60% cost ratio 30% 2-b. Schedule of expected cash disbursements-Merchandise purchases: March purchases April purchases May purchases June purchases April $ 18,300 May June Quarter 22,350 22,350 Total disbursements $ 40,650 $ 22,350 $ 0 $ 3. Schedule of expected cash disbursements-Selling and administrative expenses: April May June Quarter Salaries and wages $ 7,500 Shipping 4,200 Advertising 6,000 Other 2,800 Total disbursements $ 20,500 $ 0 $ 0 $ 0 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.) Cash Budget April May June Quarter Cash balance, beginning $ 9,000 $ 9,000 eBook Add cash collections 62,000 62,000 Total cash available 71,000 0 0 71,000 Less cash disbursements: Print For inventory purchases 40,650 40,650 For selling and administrative expenses 20,500 20,500 For equipment purchases 11,500 11,500 eferences For dividend payments 0 0 Total cash disbursements - 72,650 0 72.650 (1,650) 0 0 (1,650) Excess (deficiency) of cash Financing: Borrowings Repayments Interest Total financing 0 0 0 0 0 0 Cash balance, ending $ (1,650) $ 0 $ 0 $ (1,650) 40 points 5. Prepare an absorption costing income statement for the quarter ended June 30. LEISURE SPORTS Income Statement For the Quarter Ended June 30 eBook Cost of goods sold: Print References Less Operating expenses: 0 0 0 D $ 0 7 40 points 6. Prepare a balance sheet as of June 30. LEISURE SPORTS Balance Sheet June 30 Current assets: eBook Print References Total current assets Assets 0 Total assets $ 0 Liabilities and Stockholders' Equity Stockholders' equity: 0 Total liabilities and stockholders' equity $ 0