The owner of American Goods, Inc. provides you the following data:

Current assets 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 stock	$150,000
Retained earnings	$12,250

The gross margin is 35% of sales. Thus, the cost of goods sold is 65% of sales. Actual and budgeted sales data:

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.

Each months ending inventory should equal 80% of the following months budgeted cost of goods sold.

Forty percent of a months inventory purchases is paid for in the month of purchase; the other sixty percent is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.

Monthly expenses are as follows: commissions, 10% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 5% of sales. These expenses are paid monthly. Depreciation is $1,000 per month (includes depreciation on new assets).

Equipment costing $3,500 will be purchased for cash in April.

Management would like to maintain a minimum cash balance of at least $5,000 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 interest is not compounded. The company would, insofar as it is able to do so, repay any loans plus accumulated interest at the end of the quarter.

March (actual)	$50,000
April	$60,000
May	$72,000
June	$90,000
July	$48,000

With formulas - Required: Show all calculations. A spreadsheet workbook is highly recommended. If you use spreadsheets, attach the spreadsheet workbook to the examination file. Use the data above.

1. Create a cash budget for April, May, June and the quarter.

2. Prepare an income statement for the quarter ended June 30.

3. Prepare a balance sheet as of June 30.

4. Determine the following for American Goods, Inc. as of June 30:

a. Working Capital

b. Accounts Receivable Turnover

c. Inventory Turnover

d. Net Margin

e. Total Asset Turnover