The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:Current assets as of March 31:Cash247,900%2421,600%2442,000$ 132,000Accounts receivableInventoryBuilding and equipment, netAccounts payable2425,050$ 150,000$ 28,450Common stockRetained earningsa. The gross margin is 25% of sales.b. Actual and budgeted sales data:March (actual)AprilMay$ 54,000$ 70,000$ 75,000$ 100,000$ 51,000JuneJulyc. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March31 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. Theaccounts payable at March 31 are the result of March purchases of inventory.f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,700 per month; other expenses (excluding depreciation), 6%of sales. Assume that these expenses are paid monthly. Depreciation is $990 per month (includes depreciation on new assets).g. Equipment costing $1,900 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 anagreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to atotal loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is notcompounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required:Using the preceding data:1. Complete the schedule of expected cash collections.2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.3. Complete the cash budget.4. Prepare an absorption costing income statement for the quarter ended June 30.5. Prepare a balance sheet as of June 30.Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Required 4Required 5Complete the schedule of expected cash collections.Schedule of Expected Cash CollectionsAprilMayJuneQuarterCash sales$ 42,000Credit sales21,600Total collections$ 63,600 $$$Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.Merchandise Purchases BudgetAprilMayJuneQuarterBudgeted cost of goods soldAdd desired ending merchandise inventoryTotal needsLess beginning merchandise inventoryRequired purchasesBudgeted cost of goods sold for April = $70,000 sales x 75% = $52,500.Add desired ending inventory for April = $56,250 × 80% = $45,000.$ 52,500 $56,25045,00097,50056,25042,000$ 55,500 $56,250 $%3!Schedule of Expected Cash Disbursements-Merchandise PurchasesAprilMayJuneQuarterMarch purchasesApril purchasesMay purchasesJune purchasesTotal disbursements$ 25,050$ 25,05027,75027,75055,500$ 52,800 $27,750 $0 $ 80,550%24

Comment: The Question is Multipart, so SME will answer only three subparts as per Bartleby…

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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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