Managerial Accounting: P9-21 The following data relate to the operations of Laker Company

Managerial Accounting 
Problem 9-21 Completing a Master Budget  
The following data relate to the operations of Laker Company, a wholesale distributor:  
Current assets as of March 31:  
Cash 8,000 
Accounts receivable 20,000 
Inventory 36,000 
Buildings and equipment, net 120,000 
Accounts payable 21,750 
Capital stock 150,000 
Retained earnings 12,250 

a. The grow margin is 25% of sales. (In other words, cost of goods sold is 75% of sales.)  
b. Actual and budgeted sales data are as follows:  
March (actual) 50,000 
April 60,000 
May 72,000 
June 90,000 
July 48,000 
c. Sales are 60% of 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, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets).  
g. Equipment costing $1,500 will be purchased for cash in April.  
h. The company must maintain a minimum cash balance of $4,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month; borrowing must be in multiples of $1,000. The annual interest rate is 12%. Interest is paid only at the time of payment of principal; figure interest on whole months. (1/12 , 2/12, and so forth).  

Required: Using the preceding data:  
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.