Requirea iRequirea ZARequirea 2BRequired 3Required 4kequirea 5Prepare a balance sheet as of March 31.Hillyard CompanyBalance SheetMarch 31AssetsCurrent assets:Total current assetsTotal assetsLiabilities and Stockholders' EquityCurrent liabilities:Stockholders' equity:0.0.Total liabilities and stockholders' equity%24%24 Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have beenassembled to assist in preparing the master budget for the first quarter:a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances:CashAccounts receivableInventoryBuildings and equipment (net)Accounts payableCommon stockRetained earnings$ 47,000205,60058,800357,000$87,225500,00081,175$ 668,400 $ 668,400b. Actual sales for December and budgeted sales for the next four months are as follows:December(actual)JanuaryFebruaryMarchApril$ 257,000$ 392,000$ 589,000$ 303,000$ 200,000C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accountsreceivable at December 31 are a result of December credit sales.d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; shipping, 5%of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be$43,220 for the quarter.f. Each month's ending inventory should equal 25% of the following month's cost of goods sold.g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month.h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchasedfor cash at a cost of $73,500.i. During January, the company will declare and pay $45,000 in cash dividends.

Solution 1: Schedule of expected cash collections Particulars January February March Quarter Budgeted Sales $392,000.00 $589,000.00 $303,000.00 $1,284,000.00 Cash Sale $78,400.00 $117,800.00 $60,600.00 $256,800.00 Collection for credit sales $205,600.00 $313,600.00 $471,200.00 $990,400.00 Total Collections $284,000.00 $431,400.00 $531,800.00 $1,247,200.00 Solution 2a: Merchandise Purchase Budget Particulars January February March Quarter Budgeted Cost of Goods Sold (60% of Sales) $235,200.00 $353,400.00 $181,800.00 $770,400.00 Add: Desired ending merchandise inventory (25% of next month COGS) $88,350.00 $45,450.00 $30,000.00 $30,000.00 Total Needs $323,550.00 $398,850.00 $211,800.00 $800,400.00 Less: Beginning inventory $58,800.00 $88,350.00 $45,450.00 $58,800.00 Required purchases $264,750.00 $310,500.00 $166,350.00 $741,600.00 Solution 2b: Schedule of expected cash disbursement - Merchandise Purchases Particulars January February March Quarter March Purchases $87,225.00 $87,225.00 April Purchases $132,375.00 $132,375.00 $264,750.00 May Purchases $155,250.00 $155,250.00 $310,500.00 June Purchases $83,175.00 $83,175.00 Total Disbursement $219,600.00 $287,625.00 $238,425.00 $745,650.00 Solution 3: Schedule of expected cash disbursement of Selling and Administrative expenses Particulars January February March Quarter Salaries and wages $22,000.00 $22,000.00 $22,000.00 $66,000.00 Advertising $62,000.00 $62,000.00 $62,000.00 $186,000.00 Shipping (5% of sales) $19,600.00 $29,450.00 $15,150.00 $64,200.00 Other expenses (3% of sales) $11,760.00 $17,670.00 $9,090.00 $38,520.00 Total Disbursement $115,360.00 $131,120.00 $108,240.00 $354,720.00 Cash Budget - Hillyard company Particulars January February March Quarter Opening Cash balance $47,000.00 $30,040.00 $40,995.00 $47,000.00 Add: Collection from customers $284,000.00 $431,400.00 $531,800.00 $1,247,200.00 Total Cash Available $331,000.00 $461,440.00 $572,795.00 $1,294,200.00 Less - Cash Disbursement: For Inventory $219,600.00 $287,625.00 $238,425.00 $745,650.00 For Selling and administrative Expenses $115,360.00 $131,120.00 $108,240.00 $354,720.00 For Equipment $0.00 $1,700.00 $73,500.00 $75,200.00 For Cash Dividend $45,000.00 $0.00 $0.00 $45,000.00 Total Cash disbursement $379,960.00 $420,445.00 $420,165.00 $1,220,570.00 Excess (deficiency) of cash available over disbursements -$48,960.00 $40,995.00 $152,630.00 $73,630.00 Financing: Borrowings $79,000.00 $0.00 $0.00 $79,000.00 Repayments $0.00 $0.00 -$79,000.00 -$79,000.00 Interest $0.00 $0.00 -$2,370.00 -$2,370.00 Total Financing $79,000.00 $0.00 -$81,370.00 -$2,370.00 Ending cash balance $30,040.00 $40,995.00 $71,260.00 $71,260.00 Solution 4: Absorption costing income statement - Hillyard Company for quarter ended March 31 Particulars Amount Sales $1,284,000.00 Cost of goods sold: Beginning Inventory $58,800.00 Purchases $741,600.00 Cost of goods available for sale $800,400.00 Ending inventory $30,000.00 Cost of goods sold $770,400.00 Gross profit $513,600.00 Selling and administrative expenses Salaries and wages $66,000.00 Advertising $186,000.00 Shipping (5% of sales) $64,200.00 Other expenses (3% of sales) $38,520.00 Depreciation $43,220.00 Total Selling and administrative expenses $397,940.00 Operating income $115,660.00 Interest expense $2,370.00 Net Income $113,290.00 Solution 5: Balance Sheet- Hillyard Company 31-Mar Particulars Amount Assets Current Assets: Cash $71,260.00 Accounts receivables ($303,000*80%) $242,400.00 Inventory $30,000.00 Total Current Assets $343,660.00 Building and equipment, net ($357000 +$1,700+ $73,500- $43220) $388,980.00 Total Assets $732,640.00 Liabilities and stockholder's Equity: Current liabilities: Accounts payable (166,350*50%) $83,175.00 Stockholder's Equity: Common Stock $500,000.00 Retained Earnings (81,175 + $113,290- $45000) $149,465.00 $649,465.00 Total liabilities and stockholders equity $732,640.00