CHAPTER 8 PROBLEMS Saved Help Save & Exit Submit Check my work 3 Current assets as of Narch 31: Cash $7,900 $ 21,600 $ 42,000 132,000 $ 25,050 150,000 $ 28,450 Accounts receivable Inventory Building and equipment, net Accounts Common stock Retained earnings 02:22:28 payable a. The gross margin is 25% of sales. b. Actual and budgeted sales data: eBook March (actual) April May June July $54,000 $ 70,000 $ 75,000 100, 000 $ 51, 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 f. Monthly expenses are as follows: commissions, 12% of sales: rent, $2,700 per month; other expenses (excluding depreciation), 6% g. Equipment costing $1,900 will be purchased for cash in April. accounts payable at March 31 are the result of March purchases of inventory. of sales. Assume that these expenses are paid monthly. Depreciation is $990 per month (includes depreciation on new assets). 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 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections June April $42,000 May Quarter Cash sales Credit sales Total collections 21,600 $ 63,600 S