Problem $9-20($Static$)$ Completing a Master Budget $[$LO$2]$

The following data relate to the second quarter operations of Leisure Sports, a wholesale distributor of consumer sporting goods, as of March $31$:

Cash$$9,000$Accounts receivable$48,000$Inventory$12,600$Building and equipment, net$214,100$Accounts payable$18,300$Common shares$190,000$Retained earnings$75,400$

Actual sales for March and budgeted sales for April through July are as follows:

March $($actual$)$$$60,000$April$70,000$May$85,000$June$90,000$July$50,000$

Sales are $20\%$ cash and $80\%$ credit. Credit sales are collected in the month following sale. The accounts receivable at March $31$ are a result of March credit sales.

The company$$s gross margin is $40\%$ of sales.

Monthly expenses are as follows: salaries and wages $$7,500$ per month; shipping, $6\%$ of sales; advertising, $$6,000$ per month; other expenses, $4\%$ of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $$6,000$ in total for the quarter.

Each month$$s ending inventory should equal $30\%$ of the following month$$s cost of goods sold.

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.

Equipment costing $$11,500$ will be purchased for cash in April and $$3,000$ will be purchased for cash in May.

Dividends of $$3,500$ will be declared and paid in June.

The company must maintain a minimum cash balance of $$8,000.$ An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at$$the end of a month. The monthly interest rate is $1\%.$ Interest must be paid at the end of each month based on the total loans outstanding for that month.

Required:

Using the data above, complete the following:

$5)$ Prepare an absorption costing income statement for the quarter ended June $30.$

LEISURE SPORTS Income Statement For the Quarter Ended June $30$ Sales $ $245,000$ Cost of goods sold: Beginning inventory $ $12,600$ Add purchases $143,400$ Cost of goods sold $156,000$ P Ending inventory $9,000147,000$ Gross margin $98,000$ Less Operating expenses: Salaries and wages $22,500$ Shipping $14,700$ Advertising $18,000$ P Other expenses $9,800$ Depreciation $6,000$ P $,71,000$ Operating income $27,000$ Interest expense $13,000$ Net income $ $24,000$

$6)$Prepare a balance sheet as of June $30.$

LEISURE SPORTS Balance Sheet June $30$ Assets Current assets: Cash $ $8,400$ Account receivable $72,000$ P Inventory $9,000,,$ Total current assets $89,400,$ Total assets $ $89,400$ Liabilities and Stockholders' Equity $,,$ Stockholders' equity: Common stock $ $190,000$ Retained earnings $86,600$ P $,276,600$ Total liabilities and stockholders' equity $ $276,600$

I really need clarification for #s $5)$ and $6).$ The answers that are on Chegg do NOT line up with the chart in this assignment. I am unsure how do fill in these questions. Please explain how you got your answers as well and if there are any blanks that are left intentionally blank. PLEASE DO QUESTION $5$ AND $6$ TO LINE UP WITH THE SCREENSHOT OF THE CHARTS I SENT $($I have already asked for help with these questions and the exact same answer gets spit back and it does not line up with the chart in the assignment$)$