Please complete all if possible. I posted the second picture as they did not des

Question

Please complete all if possible. I posted the second picture as they did not describe the Merchandise Purchases Budget and Schedule of Expected Cash Disbursements in the "Required" Section.

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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: S 7,800 $ 21,200 S 41,400 S 130,880 $ 24,675 S 150,000 $ 26,525 Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings The gross margin is 25% of sales b. Actual and budgeted sales data March (actual) April May S 53,00e S 69,000 $ 74,000 $ 99,000 S 50,000 une uly 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, $2,600 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $981 per month (includes depreciation on new assets). g. Equipment costing $1,800 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 following schedule 2. Complete the following 3. Complete the following cash budget 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30.

Explanation / Answer

Merchandise Purchase Budget April May June Quarter Budgeted cost of goods sold 51750 55500 74250 181500 Add Desired ending merchandise inventory 44400 59400 30,000 30,000 total needs 96150 114900 104250 211500 less beginning merchandise inventory -41400 -44,400 -59400 -41,400 Required purchases 54750 70500 44850 170100 since gross margin in 25% of sales budgeted cost of goods sold will be 75% of sales budgeted cost of goods sold for july = 50000*75% 37500 hence ending inventory for June will be 37500*80% 30000 Schedule of Expected cash Disbursement-Merchandise purchases April May June Quarter March purchases 24,675 24,675 April purchases 27375 27,375 54750 May purchases 35250 35,250 70500 June purchases 22425 22425 total disbursements 52,050 62625 57675 172,350

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