The following data relate to the second quarter operations of Leisure Sports, a wholesale distributor of consumer sporting goods, as of March 31:

Cash	$	9,000
Accounts receivable		48,000
Inventory		12,600
Building and equipment, net		214,100
Accounts payable		18,300
Common shares		190,000
Retained earnings		75,400

1. Actual sales for March and budgeted sales for April through July are as follows:

March (actual)	$	60,000
April		70,000
May		85,000
June		90,000
July		50,000

1. 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.
2. The companys gross margin is 40% of sales.
3. 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.
4. Each months ending inventory should equal 30% of the following months cost of goods sold.
5. 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.
6. Equipment costing $11,500 will be purchased for cash in April and $3,000 will be purchased for cash in May.
7. Dividends of $3,500 will be declared and paid in June.
8. 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.

Using the data above, complete the following:

1-a. Sales budget:

1-b. Schedule of expected cash collections:

2-a. Merchandise purchases budget:

2-b. Schedule of expected cash disbursementsMerchandise purchases:

3. Schedule of expected cash disbursementsSelling and administrative expenses:

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.)

5. Prepare an absorption costing income statement for the quarter ended June 30.

6. Prepare a balance sheet as of June 30.