Sales are 40% for cash and 60% on credit. Credit sales are collected in the mont

Question

Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales.

One-quarter of a month’s inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory.

Monthly expenses are as follows: commissions, $12,980; rent, $1,950; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,810 for the quarter and includes depreciation on new assets acquired during the quarter.

Management would like to maintain a minimum cash balance of $5,000 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 $50,000. 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.

Complete the following: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Round the "Schedule of Expected Cash Disbursements — Merchandise Purchases" answers to 2 decimal places.)

Complete the following cash budget: (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed.)

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5. Prepare absorption costing income statement for the quarter ended 31 March

6. Prepare the balance sheet as of 31 March.

Note: Answer with different values is already available on Chegg but I want the answer with these values. It should be the correct one, TIA!

The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods:

Explanation / Answer

1. Cash Collection

2.

3.

4.

Income Statement and Balance Sheet is not prepared

Cah Collection January February March Cash Sales 29880 34320 37600 Jan credit sale 44820 Feb Credit Sale 51480 Dec credit sale 37560 Total 67440 79140 89080

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