[Question & Answer] Required 1Required 2 Required 3Required 4 Required 5 Complete the following schedule Schedule of…..

prepare an absorption costing income statement for the quarter ended june 30.

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:

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[Question & Answer] Required 1Required 2 Required 3Required 4 Required 5 Complete the following schedule Schedule of…..
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Current assets as of March 31:
Cash $ 9,300
Accounts receivable $ 27,200
Inventory $ 50,400
Building and equipment, net $ 102,000
Accounts payable $ 30,300
Common stock $ 150,000
Retained earnings $ 8,600

a) The gross margin is 25% of sales.

b) Actual and budgeted sales data:

March (actual) $ 68,000
April $ 84,000
May $ 89,000
June $ 114,000
July $ 65,000

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 accounts payable at March 31 are the result of March purchases of inventory.

f) Monthly expenses are as follows: commissions, 12% of sales; rent, $4,100 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $765 per month (includes depreciation on new assets).

g) Equipment costing $3,300 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.

prepare an absorption costing income statement for the quarter ended june 30.

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.

Complete this question by entering your answers in the tabs below

Required 1

Required 1Required 2 Required 3Required 4 Required 5 Complete the following schedule Schedule of Expected Cash Collections May JuneQuarter April $50,400 Cash sales Credit sales Total collections 27,200 $77,600 $

Required 2 : Complete the following

Required 3 : Complete the following cash budget: (Cash deficiency, repayments and interest should be indicated by a minus sign.

Required 4 ; Prepare an absorption costing income statement for the quarter ended June 30.

prepare an absorption costing income statement for the quarter ended june 30.

Required 5 : Prepare a balance sheet as of June 30.

Required 1Required 2 Required 3Required 4 Required 5 Complete the following schedule Schedule of Expected Cash Collections May JuneQuarter April $50,400 Cash sales Credit sales Total collections 27,200 $77,600 $

Expert Answer

prepare an absorption costing income statement for the quarter ended june 30.

Schedule of Expected Cash Collections
April May June Quarter July
Total sales T 84000 89000 114000 287000 65000
Cash Sales (60% for cash) S 50400 53400 68400 172200
Credit Sales (T-S) 27200 33600 35600 96400
Total Collections 77600 87000 104000 268600
Merchandise Purchases Budget
April May June Quarter July
Budgeted Cost of Goods Sold (75%*sales) $63,000 $66,750 $85,500 $215,250 $48,750
Add Desired Ending Inventory (80%*next COGS $53,400 $68,400 $39,000.0 $39,000.0
Total Needs $116,400 $135,150 $124,500 $254,250
Less Beginning Inventory $50,400 $53,400 $68,400 $50,400
Required Purcahses $66,000 $81,750 $56,100 $203,850
Schedule of Expected Cash Disbursements- Merchandise Purchases
(50% in same month and 50% in next month) April May June Quarter
March Purchases $30,300 $30,300
April Purchases $33,000 $33,000 $66,000
May Purchases $40,875 $40,875 $81,750
June Purchases $28,050 $28,050
Total Disbursements $63,300 $73,875 $68,925 $206,100
Shilow Company
Cash Budget
April May June Quarter
Beginnning Cash Balance 9,300 $4,080 $4,085 9,300
Add Cash Collections 77,600 87,000 104,000 268,600
Total Cash Avail 86,900 91,080 108,085 277,900
Less Cash Disbursements
For Inventory $63,300 $73,875 $68,925 $206,100
For Expenses 19220 20120 24620 63960
For Equipment 3300 3300
Total Cash Disbursements $85,820 $93,995 $93,545 $273,360
Excess(Deficiency) of Cash $1,080 ($2,915) $14,540 $4,540
Financing:
Borrowings: 3000 7000 10000
Repayments: -10000 -10000
Interest: -230 -230
Total Financing 3000 7000 -10230 -230
Ending Cash Balance $4,080 $4,085 $4,310 $4,310
Interet: (3000*3%)+(7000*2%)
working
Expenses
April May June Quarter
Comissiion (12%*sales) 10080 10680 13680 34440
Rent 4100 4100 4100 12300
Other expenses (6%*sales) 5040 5340 6840 17220
Total cash expenses 19220 20120 24620 63960
Income statement
sales 287000
Less;: Cost of Good sold $215,250
Gross profit $71,750
Less: S & A exp
Commission (12%*sales) 34440
Rent 12300
Other expenses (6%*sales) 17220
Depreciation (765*3) 2295
Total S & A exp 66255
Net operating income $5,495
Interest exp 230
Net Income $5,265
Balance sheet
Current assets
Cash 4,310
Accounts receivable 45,600
Inventory 39,000
Total Current assets 88,910
Building and equipment, net (102000+3300-2295) 103005
Total assets 191,915
Liabilities & stockholder equity
Current liabilities
Accounts payable 28,050
stockholder equity
Common stock 150000
Retained earnings $13,865
Totl stockholder equity $163,865
Total Liabilities & stockholder equity $191,915

prepare an absorption costing income statement for the quarter ended june 30.

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