Nordic Company, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the second quarter.

a.	As of March 31 (the end of the prior quarter), the companys balance sheet showed the following account balances:

Cash	$	9,000
Accounts receivable		38,400
Inventory		12,240
Buildings and equipment (net)		208,000
Accounts payable			$	16,200
Capital stock				140,000
Retained earnings				111,440
	$	267,640	$	267,640

b.	Actual sales for March and budgeted sales for AprilJuly are as follows:

March (actual)	$48,000
April	$68,000
May	$78,000
June	$83,000
July	$38,000

c.	Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following the sale. The accounts receivable at March 31 are a result of March credit sales.
d.	The companys gross margin percentage is 40% of sales. (In other words, cost of goods sold is 60% of sales.)
e.	Monthly selling and administrative expenses are budgeted as follows: salaries and wages, $6,000 per month; shipping, 6% of sales; advertising, $4,800 per month; other expenses, 4% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $4,000 for the quarter.
f.	Each months ending inventory should equal 30% of the following months cost of goods sold.
g.	Half of a months inventory purchases are paid for in the month of purchase and half in the following month.
h.	Equipment purchases during the quarter will be as follows: April, $9,000; and May, $7,000.
i.	Dividends totaling $2,000 will be declared and paid in June.
j.	Management wants to maintain a minimum cash balance of $8,000. 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 $20,000. 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, complete the following statements and schedules for the second quarter:
1.	Schedule of expected cash collections: Prepare an absorption costing income statement for the quarter ending June 30. (Input all amounts as positive values.) Nordic Company Income Statement For the Quarter Ended June 30 (Click to select)Goods available for saleBeginning inventoryGross marginNet operating income (loss)SalesDepreciationEnding inventoryAdvertising $ Cost of goods sold: (Click to select)Net operating income (loss)Gross marginAdvertisingGoods available for saleDepreciationEnding inventoryBeginning inventorySales $ (Click to select)Ending inventorySalesPurchasesGross marginNet income (loss)Net operating income (loss)Goods available for salesDepreciation (Click to select)Beginning inventoryAdvertisingGross marginNet income (loss)Goods available for saleDepreciationNet operating income (loss)Purchases (Click to select)Ending inventoryNet operating income (loss)Beginning inventorySalesAdvertisingPurchasesDepreciationGross margin (Click to select)Beginning inventorySalesGross marginNet operating income (loss)Goods available for saleEnding inventoryAdvertisingNet income (loss) Selling and administrative expenses: (Click to select)Salaries and wagesGross marginOther expensesAdvertisingDepreciationNet operating income (loss)ShippingGoods available for sale (Click to select)ShippingOther expensesGoods available for saleDepreciationNet operating income (loss)Salaries and wagesGross marginAdvertising (Click to select)Gross marginOther expensesAdvertisingShippingSalaries and wagesGoods available for saleDepreciationNet operating income (loss) (Click to select)Goods available for saleDepreciationAdvertisingNet operating income (loss)ShippingOther expensesGross marginSalaries and wages (Click to select)Net operating income (loss)Gross marginDepreciationSalaries and wagesOther expensesAdvertisingShippingGoods available for sale (Click to select)Beginning inventoryAdvertisingGoods available for salePurchasesSalesEnding inventoryNet operating income (loss)Gross margin (Click to select)Interest expenseCost of goods manufacturedBeginning inventoryNet operating income (loss)SalesEnding inventoryAdvertisingGross margin (Click to select)SalesGoods available for saleBeginning inventoryGross marginNet income (loss)Ending inventoryAdvertisingPurchases $ 6. Prepare a balance sheet as of June 30. (Be sure to list the assets and liabilities in order of their liquidity.) Nordic Company Balance Sheet June 30 Assets Current assets: (Click to select)CashAccounts payableAccounts receivableBuildings and equipment, netInventory $ (Click to select)InventoryBuildings and equipment, netAccounts receivableAccounts payableCash (Click to select)Accounts receivableAccounts payableInventoryBuildings and equipment, netCash Total current assets (Click to select)Buildings and equipment, netAccounts receivableCashInventoryAccounts payable Total assets $ Liabilities and Stockholders Equity Current liabilities: (Click to select)CashBank loan payableAccounts payableAccounts receivableCapital stock $ Stockholders' equity: (Click to select)CashAccounts payableAccounts receivableInventoryCapital stock $ (Click to select)Accounts receivableInventoryRetained earningsAccounts payableCash Total liabilities and stockholders equity $