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The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: $ $ $ Current assets as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings 8.200 22.800 43 800 128.400 26,175 150 000 27,025 $ $ a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July S57000 s 73000 700 $ 101000 5 54 000 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 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 avable at March 31 are the result of March nurchases of inventor Prev 1 of 1 Next 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, $3,000 per month other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $963 per month (includes depreciation on new assets). g. Equipment costing $2,200 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 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 for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: Using the preceding data: 1. Complete the schedule of expected cash collections 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget. 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Prev 1 of 1 Next 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise 3. Complete the cash budget. 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Quarter Schedule of Expected Cash Collections April May June Cash sales $ 43,800 $ 46,800 $ 61,800 Credit sales 22,800 31,2007 41,200 Total collections $ 66,600 $ 78,000 103.000 95,200 247,600 Required 2 > Prey 1 of 1 !!! Next Required 1 Required 2 Required 3 Required 4 Required 5 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purch Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold $ 54,750 $58,500 $ 77,250 $ 190,500 Add desired ending merchandise inventory 46,800 61,800 152,400 261,000 Total needs 101,550 120,300 229,650 451,500 Less beginning merchandise inventory 43,800 Required purchases $ 57,750 20.300 $ 229,650 $ 451,500 Budgeted cost of goods sold for April = $73,000 sales x 75% = $54,750. Add desired ending inventory for April = $58,500 80% = $46,800. Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 26,175 $ 26,175 April purchases 28,875 28,875 57,750 May purchases June purchases Total disbursements $ 55,050 $28,875 $ 0 $ 83,925 Prev 1 of 1 Next Requirea Required 2 Required 3 requirea 4 kequired Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) June Quarter Shilow Company Cash Budget April May $ 8,200 $ 4,785 66,600| 76,000 74,800 80,785 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments 55,050 16,140 2,200 73,390 1,410 0 80,785 0 0 6,000 Interest Total financing 0 0 6,000 $ 86,785 Ending cash balance $ 1,410 $ Prev 1 of 1 !!! Next Prepare an absorption costing income statement for the quarter ended June 30. Shilow Company Income Statement For the Quarter Ended June 30 Sales Cost of goods sold: Selling and administrative expenses: Prev 1 of 1 !!! Next Prepare a balance sheet as of June 30. Shilow Company Balance Sheet June 30 Assets Current assets: Cash Accounts receivable Inventory Building and equipment-net | Total current assets Total assets DE $ Liabilities and Stockholders' Equity $ Aike Accounts payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity Prey 1 of 1

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