The following data relate to the operations of Miken Comapny, a distributor of consumer goods.

Accounts as of March 31:

Cash ........... $8,000

A/R ........... $20,000

Inventory ........ $36,000

Building & Equip (net) .. $120,000

A/P ........... $21,750

Capital stock ...... $150,000

Retained Earnings ...... $12,250

A. The gross margin is 25% of sales

B. Actual and budgeted sales data:

March (actual) .... $50,000

April ........ $60,000

May ......... $72,000

June ......... $90,000

July .......... $48,000

C. Sales are 60% cash and 40% credit. Credit sales are collected in the month following sale. The A/R 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 COGS.

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 A/P at March 31 are the result of March purchases of inventory.

F. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month.

G. Equipment costing $1,500 will be purchased for cash in April

H. The company must maintain a minimum cash balance of $4,000. 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 the month; borrowing must be in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of repayment of principal.

Using this information complete the following schedules:

1. Schedules of expected cash collections

2. Merchandise purchase budget

3. Schedule of cash disbursements (merchandise)

4. Schedule of cash disbursements (operating expenses)

5. Cash budget