3 4 Based on the information available to you, complete the Cash Budget worksheet below: 5 6 Check figures are: January Cash Receipts = $230,330; February Cash Disbursements = 7 $181,918; March Ending Cash Balance = $375,286. 9 Solution: Get Laughy Taffy, Inc. PLANNED CASH TRANSACTIONS and CASH BUDGET For the Month Ending, Jan 31, 2020 Feb 29, 2020 Mar 31, 2020 15 Beginning of Month Cash Balance 16 17 CASH IN 18 This Month's Sales 19 Last Month's Sales 20 21 Total Cash Receipts for Month 22 23 Total Cash Available During Month 24 25 CASH OUT 26 Last Month's Purchases 27 This Month's Purchases 28 Marketing 29 Commissions 30 Selling & Administrative 31 Insurance 32 Interest Budget Planning Document 22 Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income : ... : 4. Based on the information available to you, complete the Cash Budget worksheet below: 6 Check figures are: January Cash Receipts = $230,330; February Cash Disbursements = 7 $181,918; March Ending Cash Balance = $375,286. 9 Solution: Get Laughy Taffy, Inc. PLANNED CASH TRANSACTIONS and CASH BUDGET For the Month Ending, Jan 31, 2020 Feb 29, 2020 Mar 31, 2020 CASH OUT 26 Last Month's Purchases 27 This Month's Purchases 28 Marketing 29 Commissions BO Selling & Administrative 31 Insurance B2 Interest B3 Income Tax 34 Dividends 35 36 Total Cash Disbursements for Month 31 38 End of Month Cash Balance Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income: ... + 4 A relatively new company, Get Laughy Taffy, Inc., has determined they need to engage in a budgeting 5 process as part of their new strategic plan. The Company has asked you to provide the following items 5 for the months of January, February, and March of 2020: A) a Purchases Budget; B) a Cash Budget; C) a 7 Budgeted Income Statement; and D) a Budgeted Balance Sheet. They have provided you with the 3 planning document below and also, with their December 31, 2019 Balance Sheet. Please complete the 9 four budget documents requested on Worksheet Tabs A, B, C, and D of this Workbook. Check Figures 0 are provided for you on each Worksheet. Get Laughy Taffy, Inc. PLANNING DATA FOR 2020 $ 245,000 $ 266,000 7 Actual November 2019 Sales 8 Actual December 2019 Sales 9 Expected 2020 Monthly Sales January 21 February 22 March 23 April $ 179,000 $ 184,000 $ 163,000 $176,000 25 All Sales are on Credit P6 Collections of Accounts Receivable: 27 Month of Service 28 Month following Service 41.00% 59.00% 30 Cost of Goods Sold as a percentage of selling price. 65.00% 52 Planned ending inventory as a percentage of next month's required inventory. 62.00% 34 Purchases are are all on credit. 35 Actual Purchases made in December 2019 $137,839 D E F G H I J K L M N O P A B C 35 Actual Purchases made in December 2019 $137,839 Purchases paid in current month 30.00% 37 Purchases paid in next month 70.00% 38 39 Marketing expenses have a fixed and variable portion: 40 Fixed portion $3,540 41 The fixed portion of the marketing is paid in the current month. 42 Variable portion as a percentage of sales 1.50% 43 The variable portion is paid two months after the month incurred. 44 45 Sales commission as a percent of sales 2.50% 46 Sales commission are paid one month after the month incurred. 47 48 Selling and Administrative expenses have a fixed and variable portion: 49 Fixed portion is paid in the month incurred $19,800 50 Variable portion as a percentage of sales 2.00% 51 Variable S&A expenses are paid one month after the month incurred 52 53 The annual interest rate on the long term debt is 4.00% 54 Interest is incurred on the principal balance outstanding each month. Interest is paid on a quarterly basis. Interest for December to February will be paid March 1. 56 No principal payments are scheduled to be made on the long-term debt until September of 2021. 57 58 Depreciation expense per month $5,300 59 60 Insurance policy: 61 Months of insurance coverage paid for 12 62 The policy period is from February 1 to January 31 each year 63 The premium to be paid on February 1, 2020 is $15,336 The premium will be charged to prepaid insurance 65 Insurance premium that was paid on February 1, 2019 $15,660 66 27 Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget 55 64 C. Budgeted Income : ... TI 53 The annual interest rate on the long term debt is 4.00% Interest is incurred on the principal balance outstanding each month. Interest is paid on a quarterly basis. Interest for December to February will be paid March 1. No principal payments are scheduled to be made on the long-term debt until September of 2021. 56 $5,300 12 58 Depreciation expense per month 59 50 Insurance policy: 31 Months of insurance coverage paid for 52 The policy period is from February 1 to January 31 each year 53 The premium to be paid on February 1, 2020 is 54. The premium will be charged to prepaid insurance 55 Insurance premium that was paid on February 1, 2019 $15,336 $15,660 56 57 Income Tax rate 21.00% 58 Accrued taxes for the three previous full months are paid on the 15th of January, April, July and October. 59 $15,000 70 The Company's Board of Directors plans to declare a dividend on January 20. 71 It will be paid on February 5. Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income : ... A E GH. M N UP R 3 4. Use the information provided on the December 31, 2019 Balance 5 Sheet shown below to help you create the budgeting documents Get Laughy Taffy, Inc. BALANCE SHEET December 31, 2019 ASSETS $ 12 Current Assets 13 Cash 14 Accounts Receivable 15 Inventory 16 Prepaid Insurance 17 Total Current Assets 303,200 156,940 72,137 1,305 533,582 18 19 Property Plant and Equipment 20 Equipment 21 Accumulated Depreciation 22 Total Property Plant and Equipment 23 24 Total Assets 318,000 (63,600) 254,400 $ 787,982 LIABILITIES AND SHAREHOLDERS EQUITY LIABILITIES 29 Current Liabilities 30 Accounts Payable - Purchases 96,487 31 Sales Commission Payable 6,650 32 Selling and Administrative Payable 5,320 33 Interest Payable 450 34 Marketing Payable 7,665 Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income: ... + G H I J K L M N O Q R S - B 450 7,665 14,977 131,549 33 Interest Payable 34 Marketing Payable 35 Income Taxes Payable 36 Dividends Payable 37 Total Current Liabilities 38 39 Long Term Debt 40 41 Total Liabilities 42 SHAREHOLDERS' EQUITY 44 Common Stock 45 Retained Earnings 135,000 266,549 43 104,000 417,433 46 521,433 47 Total Shareholders' Equity 48 49 Total Liabilities and Shareholders Equity $ 787,982 62 63 64 Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income! ... + @ J -_ + + 100% 3 4 Based on the information available to you, complete the Cash Budget worksheet below: 5 6 Check figures are: January Cash Receipts = $230,330; February Cash Disbursements = 7 $181,918; March Ending Cash Balance = $375,286. 9 Solution: Get Laughy Taffy, Inc. PLANNED CASH TRANSACTIONS and CASH BUDGET For the Month Ending, Jan 31, 2020 Feb 29, 2020 Mar 31, 2020 15 Beginning of Month Cash Balance 16 17 CASH IN 18 This Month's Sales 19 Last Month's Sales 20 21 Total Cash Receipts for Month 22 23 Total Cash Available During Month 24 25 CASH OUT 26 Last Month's Purchases 27 This Month's Purchases 28 Marketing 29 Commissions 30 Selling & Administrative 31 Insurance 32 Interest Budget Planning Document 22 Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income : ... : 4. Based on the information available to you, complete the Cash Budget worksheet below: 6 Check figures are: January Cash Receipts = $230,330; February Cash Disbursements = 7 $181,918; March Ending Cash Balance = $375,286. 9 Solution: Get Laughy Taffy, Inc. PLANNED CASH TRANSACTIONS and CASH BUDGET For the Month Ending, Jan 31, 2020 Feb 29, 2020 Mar 31, 2020 CASH OUT 26 Last Month's Purchases 27 This Month's Purchases 28 Marketing 29 Commissions BO Selling & Administrative 31 Insurance B2 Interest B3 Income Tax 34 Dividends 35 36 Total Cash Disbursements for Month 31 38 End of Month Cash Balance Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income: ... + 4 A relatively new company, Get Laughy Taffy, Inc., has determined they need to engage in a budgeting 5 process as part of their new strategic plan. The Company has asked you to provide the following items 5 for the months of January, February, and March of 2020: A) a Purchases Budget; B) a Cash Budget; C) a 7 Budgeted Income Statement; and D) a Budgeted Balance Sheet. They have provided you with the 3 planning document below and also, with their December 31, 2019 Balance Sheet. Please complete the 9 four budget documents requested on Worksheet Tabs A, B, C, and D of this Workbook. Check Figures 0 are provided for you on each Worksheet. Get Laughy Taffy, Inc. PLANNING DATA FOR 2020 $ 245,000 $ 266,000 7 Actual November 2019 Sales 8 Actual December 2019 Sales 9 Expected 2020 Monthly Sales January 21 February 22 March 23 April $ 179,000 $ 184,000 $ 163,000 $176,000 25 All Sales are on Credit P6 Collections of Accounts Receivable: 27 Month of Service 28 Month following Service 41.00% 59.00% 30 Cost of Goods Sold as a percentage of selling price. 65.00% 52 Planned ending inventory as a percentage of next month's required inventory. 62.00% 34 Purchases are are all on credit. 35 Actual Purchases made in December 2019 $137,839 D E F G H I J K L M N O P A B C 35 Actual Purchases made in December 2019 $137,839 Purchases paid in current month 30.00% 37 Purchases paid in next month 70.00% 38 39 Marketing expenses have a fixed and variable portion: 40 Fixed portion $3,540 41 The fixed portion of the marketing is paid in the current month. 42 Variable portion as a percentage of sales 1.50% 43 The variable portion is paid two months after the month incurred. 44 45 Sales commission as a percent of sales 2.50% 46 Sales commission are paid one month after the month incurred. 47 48 Selling and Administrative expenses have a fixed and variable portion: 49 Fixed portion is paid in the month incurred $19,800 50 Variable portion as a percentage of sales 2.00% 51 Variable S&A expenses are paid one month after the month incurred 52 53 The annual interest rate on the long term debt is 4.00% 54 Interest is incurred on the principal balance outstanding each month. Interest is paid on a quarterly basis. Interest for December to February will be paid March 1. 56 No principal payments are scheduled to be made on the long-term debt until September of 2021. 57 58 Depreciation expense per month $5,300 59 60 Insurance policy: 61 Months of insurance coverage paid for 12 62 The policy period is from February 1 to January 31 each year 63 The premium to be paid on February 1, 2020 is $15,336 The premium will be charged to prepaid insurance 65 Insurance premium that was paid on February 1, 2019 $15,660 66 27 Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget 55 64 C. Budgeted Income : ... TI 53 The annual interest rate on the long term debt is 4.00% Interest is incurred on the principal balance outstanding each month. Interest is paid on a quarterly basis. Interest for December to February will be paid March 1. No principal payments are scheduled to be made on the long-term debt until September of 2021. 56 $5,300 12 58 Depreciation expense per month 59 50 Insurance policy: 31 Months of insurance coverage paid for 52 The policy period is from February 1 to January 31 each year 53 The premium to be paid on February 1, 2020 is 54. The premium will be charged to prepaid insurance 55 Insurance premium that was paid on February 1, 2019 $15,336 $15,660 56 57 Income Tax rate 21.00% 58 Accrued taxes for the three previous full months are paid on the 15th of January, April, July and October. 59 $15,000 70 The Company's Board of Directors plans to declare a dividend on January 20. 71 It will be paid on February 5. Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income : ... A E GH. M N UP R 3 4. Use the information provided on the December 31, 2019 Balance 5 Sheet shown below to help you create the budgeting documents Get Laughy Taffy, Inc. BALANCE SHEET December 31, 2019 ASSETS $ 12 Current Assets 13 Cash 14 Accounts Receivable 15 Inventory 16 Prepaid Insurance 17 Total Current Assets 303,200 156,940 72,137 1,305 533,582 18 19 Property Plant and Equipment 20 Equipment 21 Accumulated Depreciation 22 Total Property Plant and Equipment 23 24 Total Assets 318,000 (63,600) 254,400 $ 787,982 LIABILITIES AND SHAREHOLDERS EQUITY LIABILITIES 29 Current Liabilities 30 Accounts Payable - Purchases 96,487 31 Sales Commission Payable 6,650 32 Selling and Administrative Payable 5,320 33 Interest Payable 450 34 Marketing Payable 7,665 Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income: ... + G H I J K L M N O Q R S - B 450 7,665 14,977 131,549 33 Interest Payable 34 Marketing Payable 35 Income Taxes Payable 36 Dividends Payable 37 Total Current Liabilities 38 39 Long Term Debt 40 41 Total Liabilities 42 SHAREHOLDERS' EQUITY 44 Common Stock 45 Retained Earnings 135,000 266,549 43 104,000 417,433 46 521,433 47 Total Shareholders' Equity 48 49 Total Liabilities and Shareholders Equity $ 787,982 62 63 64 Budget Planning Document Dec 2019 Balance Sheet A. Purchases Budget B. Cash Budget C. Budgeted Income! ... + @ J -_ + + 100%