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File Edit View Favorites Tools Help ià C) canvas Tabs O] Baker, Annarose-Outloo ?Connect-New tal Ch. 8 Comprehensive Problem Saved Help Sa The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: 100 points $ 7,400 s 19, 600 $ 39, 000 Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings eBook $126, 000 $ 23,175 $150,000 s 18,825 Print References a. The gross margin is 25% of sales b. Actual and budgeted sales data March (actual) $49,000 April Mav $65,000 $70,000 Mc Graw Ptev 1 of 1ES

Explanation / Answer

1 Schedule of Expected Cash Collections April May June Quarter Cash Sales 39000 42000 57000 138000 Credit Sales 19600 26000 28000 73600 Total Collections 58600 68000 85000 211600 2 Merchandise Purchases Budget April May June Quarter Budgeted Cost of goods sold 48750 52500 71250 172500 Add:Desired ending inventory 42000 57000 27600 27600 Total Needs 90750 109500 98850 200100 Less: beginning Inventory 39000 42000 57000 39000 Required Purchases 51750 67500 41850 161100 3 Schedule of Expected Cash Disbursements—Merchandise Purchases April May June Quarter March Purchases 23175 23175 April Purchases 25875 25875 51750 May Purchases 33750 33750 67500 June Purchases 20925 20925 Total 49050 59625 54675 163350 Cash Budget April May June Quarter Cash Balance, Beginning 7400 4650 4225 7400 Add:Cash Collections 58600 68000 85000 211600 Total Cash Available 66000 72650 89225 219000 Less: Cash Disbursments For Inventory 49050 59625 54675 163350 For Expenses 13900 14800 19300 48000 For Equipment 1400 0 0 1400 Total Cash Disbursmenrts 64350 74425 73975 212750 Excess/(Deficiency) of cash 1650 -1775 15250 6250 Financing Borrowing 3000 6000 0 9000 Repayments 0 0 -9000 -9000 Interest 0 0 -90 -90 Total Financing 3000 6000 -9090 -90 Cash Balance Ending 4650 4225 6160 6160 Schedule of Expected Cash Disbursements—Selling and Administrative Expenses April May June Quarter Commission 7800 8400 11400 27600 Rent 2200 2200 2200 6600 Other Expenses 3900 4200 5700 13800 Total Disbursments 13900 14800 19300 48000 Shallow company Income Statement Sales 230000 Cost of goods sold Beginning inventory 39000 add: Purcahses 161100 Goods Available for sale 200100 Less: Ending inventory 27600 172500 Gross margin 57500 Selling and administrative expense Commission 27600 Rent 6600 Depriciation (945*3) 2835 Other Expenses 13800 Net Operating Income 6665 Less: Interest Expense -90 Net Income 6575 Shilow Company Balance Sheet June 30 Assets Current Assets Cash 6160 Accounts Receivable 95000*.4 38000 Inventory 27600 Total Current Assets 71760 Building and equipment- net 124565 Total Assets 196325 Liabilities And Equity Accounts Payable 20925 Capital Stock 150000 Retained Earnings 18825+6575 25400 Total Liabiliies and equity 196325

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