Managerial Accounting for Managers: P9-26 The following data relate to the operations of Picanuy

Managerial Accounting for Managers 
Problem 9-26 Picanuy Corporation 
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. 

Using the data above: 
1. Complete the following schedule of expected cash collections: 
2. Complete the following merchandise purchases budget andschedule of cash disbursements. 
3. Complete the following schedule of cash disbursements for selling and administrative expenses. 
4. Complete the following cash budget. 
5. Prepare an absorption costing income statement, similar to the one shown in Schedule 9 in the chapter, for the quarter ended March 31. 
6. Prepare a balance sheet as of March 31.