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

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

Current assets as of December 31:
Cash	$	6,000
Accounts receivable	$	36,000
Inventory	$	9,800
Buildings and equipment, net	$	110,885
Accounts payable	$	32,550
Capital stock	$	100,000
Retained earnings	$	30,135

a.	The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.)
b.	Actual and budgeted sales data are as follows:

December (actual)	$60,000
January	$70,000
February	$80,000
March	$85,000
April	$55,000

c.	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.
d.	Each month’s ending inventory should equal 20% of the following month’s budgeted cost of goods sold.
e.	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.
f.	Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter.
g.	Equipment will be acquired for cash: $3,000 in January and $8,000 in February.
h.	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.

Required:
Using the data above:
1.	Complete the following schedule. (Omit the "$" sign in your response.)

Schedule of Expected Cash Collections
	January	February	March	Quarter
Cash sales	$28,000	$	$	$
Credit sales	36,000
Total collections	$64,000	$	$	$

2.	Complete the following: (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.)

Merchandise Purchases Budget
	January		February	March	Quarter
Budgeted cost of goods sold	$49,000	*	$	$	$
Add desired ending inventory	11,200	†
Total needs	60,200
Less beginning inventory	9,800
Required purchases	$50,400		$	$	$

*$70,000 sales × 70% = $49,000.

†$80,000 × 70% × 20% = $11,200.

Schedule of Expected Cash Disbursements—Merchandise Purchases
		January		February		March		Quarter
December purchases		$ 32,550	*	$		$		$ 32,550
January purchases		12,600		37,800				50,400
February purchases
March purchases
Total disbursements		$ 45,150		$		$		$

*Beginning balance of the accounts payable.

3.	Complete the following schedule: (Omit the "$" sign in your response.)

Schedule of Expected Cash Disbursements—Selling and Administrative Expenses
	January	February	March	Quarter
Commissions	$12,000	$	$	$
Rent	1,800
Other expenses	5,600
Total disbursements	$19,400	$	$	$

4.	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. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Picanuy Corporation
Cash Budget
	January	February	March	Quarter
Cash balance, beginning	$ 6,000	$	$	$
Add cash collections	64,000
Total cash available	70,000
Less cash disbursements:
For inventory	45,150
For operating expenses	19,400
For equipment	3,000
Total cash disbursements	67,550
Excess (deficiency) of cash	2,450
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending	$	$	$	$

5.	Prepare an absorption costing income statement for the quarter ended March 31. (Input all amounts as positive values. Omit the "$" sign in your response.)

Picanuy Corporation Income Statement For the Quarter Ended March 31
(Click to select) Other expenses Net income (loss) Goods available for sale Net operating income (loss) Beginning inventory Sales Ending inventory Gross margin		$
Cost of goods sold:
(Click to select) Beginning inventory Net operating income (loss) Other expenses Purchases Depreciation Goods available for sale Gross margin Ending inventory	$
(Click to select) Depreciation Net operating income (loss) Ending inventory Interest expenses Other expenses Sales Purchases Gross margin
(Click to select) Sales Gross margin Goods available for sale Net operating income (loss) Purchases Other expenses Depreciation Beginning inventory
(Click to select) Other expenses Beginning inventory Interest expenses Ending inventory Purchases Gross margin Depreciation Net operating income (loss)
(Click to select) Net operating income (loss) Beginning inventory Goods available for sale Gross margin Purchases Net income (loss) Sales Interest expense
Selling and administrative expenses:
(Click to select) Gross margin Other expenses Rent Net operating income (loss) Commissions Beginning inventory Goods available for sale Depreciation
(Click to select) Depreciation Rent Beginning inventory Goods available for sale Net operating income (loss) Gross margin Other expenses Commissions
(Click to select) Gross margin Depreciation Rent Beginning inventory Other expenses Commissions Net operating income (loss) Goods available for sale
(Click to select) Gross margin Goods available for sale Rent Beginning inventory Other expenses Depreciation Net operating income (loss) Commissions
(Click to select) Ending inventory Net operating income (loss) Commissions Sales Gross margin Goods available for sale Depreciation Purchases
(Click to select) Interest expense Net operating income (loss) Sales Beginning inventory Ending inventory Gross margin Depreciation Other expenses
(Click to select) Goods available for sale Net income (loss) Depreciation Sales Other expenses Ending inventory Gross margin Interest expense		$

6.	Prepare a balance sheet as of March 31. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)

Picanuy Corporation Balance Sheet March 31
Assets
Current assets:
(Click to select) Inventory Accounts payable Cash Fixed assets-net Accounts receivable		$
(Click to select) Fixed assets-net Accounts receivable Cash Accounts payable Inventory
(Click to select) Inventory Accounts payable Fixed assets-net Cash Accounts receivable
Total current assets
(Click to select) Cash Accounts payable Inventory Accounts receivable Fixed assets-net
Total assets		$
Liabilities and Stockholders’ Equity
(Click to select) Capital stock Bank loan payable Retained earnings Accounts receivable Accounts payable		$
(Click to select) Accounts receivable Capital stock Bank loan payable Retained earnings Accounts payable
Stockholders' equity:
(Click to select) Cash Accounts payable Bank loan payable Accounts receivable Capital stock	$
(Click to select) Cash Bank loan payable Accounts payable Retained earnings Accounts receivable
Total liabilities and stockholders’ equity		$