6 ezto.mheducation.com Question 1 Problem 9-44 ~ Connect Dashboard Problem 944 o Sal/ed Help Save 8. Exit Submit 1 0 Part 1 of 9 [The following information applies to the questions displayed below] Required information \"We really need to get this new materialhandling equipment in operation just after the new year begins I hope we can finance it largely with cash and marketable securities, but if necessary we can get a shortterm loan down at MetroBank." 2:\": This statement by Beth Davies-Lowry, president oflntercoastal Electronics Company, concluded a meeting she had called with the firm's top management Intercoastal is a small, rapidly growing wholesaler of consumer electronic products, The Skipped firm's main product lines are small kitchen appliances and power tools, Marcia Wilcox, lntercoastal's General Manager of Marketing, has recently completed a sales forecast. She believes the company's sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month's sales. Then Wilcox expects sales to remain constant for several months. Intercoastal's projected balance sheet as of December 31, 20x0, is as follows: eBook Cash $ 35,000 Accounts receivable 224,000 g Marketable securities 20,000 Prim Inventory 154,000 Buildings and equipment (net of accumulated depreciation) 540,000 Total assets $ 973.000 Accounts payable $ 205,800 Bond interest payable 7,500 Property taxes payable 2,400 Bonds payable (1295; due in 20x6) 150,000 Common stock 500,000 Retained earnings 107,300 Total liabilities and stockholders' equity $973,000 Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated: 1. Projected sales for December of 20x0 are $400,000 Credit sales typically are 70 percent of total sales, lntercoastal's credit experience indicates that 20 percent ofthe credit sales are collected during the month of sale, and the remainder are collected during the following month, 2. Intercoastal's cost of goods sold generally runs at 70 percent of sales. Inventow is purchased on account, and 30 Ca? % Prev 1 2 3 9 of9 555 Next) 6 ezto.mheducation.com Question 1 Problem 9-44 ~ Connect Dashboard Problem 944 o Sal/ed Help Save 8. Exit Submit Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated: 1. Projected sales for December of 20x0 are $400,000. Credit sales typically are 70 percent of total sales. Intercoastal's credit experience indicates that 20 percent ofthe credit sales are collected during the month of sale, and the remainder Pa\" 1 0f 9 are collected during the following month. ' 2. lntercoastal's cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 30 percent of each month's purchases are paid during the month of purchase. The remainder is paid during the following 055 month. In order to have adequate stocks ofinventory on hand, the rm attempts to have inventory at the end ofeach month equal to half of the next month's projected cost of goods sold, points 3. Hanson has estimated that Intercoastal's other monthly expenses will be as follows: Skipped Sales salaries $22,000 Advertising and promotion 18,000 a Administrative salaries 22,000 Depreciation 20,000 eBODk Interest on bonds 1,500 Property taxes 600 iEll In addition, sales commissions run at the rate of3 percent of sales. 4. lntercoastal's president, Davies-Lowry, has indicated that the firm should invest $105,000 in an automated inventory- handling system to control the movement ofinventory in the firm's warehousejust after the new year begins. These equipment purchases will be financed primarily from the rm's cash and marketable securities, However, Davies-Lowry believes that lntercoastal needs to keep a minimum cash balance of $35,000. If necessary, the remainder of the equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases lfa loan is necessary, DaviesLowry has decided it should be paid off by the end ofthe rst quarter if possible 5. lntercoastal's board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of each quarter. 6. The interest on any shortterm borrowing will be paid when the loan is repaid. Interest on lntercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period, 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. Required: Prepare Intercoastal Electronics Company's master budget for the rst quarter of 20x1 by completing the following Ca? % Prev 1 2 3 9 of9 555 Next) 6 ezto.mheducation.com Question 1 Problem 9-44 ~ Connect Dashboard Problem 944 o Sal/ed Help Save 8. Exit Submit 1 In addition, sales commissions run at the rate of3 percent of sales. 4. lntercoastal's president, Davies-Lowry, has indicated that the firm should invest $105,000 in an automated inventory- handling system to control the movement ofinventory in the firm's warehousejust after the new year begins. These equipment purchases will be financed primarily from the rm's cash and marketable securities. However, Davies-Lowry Far\" f9 believes that Intercoastal needs to keep a minimum cash balance of $35,000. If necessary, the remainder of the ' equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases If a loan is necessary. Davies-Lowry has decided it should be paid off by the end ofthe rst quarter if 2:\": possible. 5. lntercoastal's board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of Skipped each quarter. 6. The interest on any shortterm borrowing will be paid when the loan is repaid. Interest on lntercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period, 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. eBook Required: _ Prepare Intercoastal Electronics Company's master budget for the rst quarter of 20x1 by completing the following a schedules and statements. 1. Sales budget: Total sales Cash sales Sales on account Ca? % Prev 1 2 3 9 of9 555 Next) 6 eztomheducationcom Question 2 Problem 944 Connect Dashbmaid Problem 9-44 0 Sal/ed Help Save & Exit Submit u. uuuluuli, smes cumumsmus mm at me .me u. a pelcem u. smes. 4. lntercoastal's president, Davies-Lowry, has indicated that the firm should invest $105,000 in an automated inventory- handling system to control the movement of inventory in the firm's warehousejust after the new year begins. These equipment purchases will be financed primarily from the rm's cash and marketable securities. However, Davies-Lowry believes that lntercoastal needs to keep a minimum cash balance of $35,000. If necessary, the remainder of the pan: org equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is - three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases. Ifa loan is necessary, Davies-Lowry has decided it should be paid off by the end of the rst quarter if possible. 055; 5. lntercoastal's board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of pom 5 each quarter. 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on lntercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period, 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. skipped Required: B k e 00 Prepare lntercoastal Electronics Company's master budget for the rst quarter of 20x1 by completing the following _ schedules and statements. E! 2. Cash receipts budget: Cash sales Cash collections from credit sales made during current month Cash collections from credit sales made during preceding month Total cash receipts m g 6 eztomheducationcom Question 3 Problem 944 ~ Connect Dashboard Problem 9-44 0 Saved 3 Part3 OH? 0.55 points skipped me: Now. . .uusw venues ow. me "new.\" .utw W .V percent we. yew m me ....e or we \"WWW... purchases. Ifa loan is necessary, Davies-Lowry has decided it should be paid off by the end of the rst quarter if possible. 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of each quarter. 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on lntercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period, 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. Required: Prepare Intercoastal Electronics Company's master budget for the rst quarter of 20x1 by completing the following schedules and statements. Help 3. Purchases budget: Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less: Expected beginning inventory Purchases $ 0 $ 0 $ 0 $ 0 $ 0 C'D ( Prev 3 4 5 9 of9 55! Next > Save & Exit Submit G E eztomheducationcom Question 4 , Problem 944 ~ Connect Dashboard Problem 9-44 0 SaVed Help Save & Exit Submit 4 semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 forthe preceding six-month period. Required: Pa" 4 f 9 Prepare Intercoastal Electronics Company's master budget for the rst quarter of 20x1 by completing the following schedules and statements. 0.55 poms 4. Cash disbursements budget: (Round your inventory purchases up to the nearest whole dollar.) skipped Inventory purchases: 930\" Cash payments for purchases during the current month Cash payments for purchases during the preceding month E Total cash payments for inventory purchases Print Other expenses: Sales salaries Advertising and promotion Administrative salaries Interest on bonds Property taxes Sales commissions Total cash payments for other expenses Total cash disbursements Next ) m % (Prev 4 5 69 of9 G E eztomheducationcom Question 5 , Problem 9744 , Connect Dashboard Problem 9-44 0 SaVed Help Save & Exit Submit .. ...- ....-.c... w. ...., -...... c.... w..e.....g e- pa.\" ....... t..- WU... .. .-..'W. we.-.\" .... ....-.wwwm -.....\" .. p...\" 5 semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. Pan 5 of9 Required: _ Prepare Intercoastal Electronics Company's master budget for the rst quarter of 20x1 by completing the following schedules and statements. 0.55 points 5. Complete the first three lines ofthe summary cash budget. Then do the analysis of short-term nancing needs in requirement 6. skipped Then finish requirement 5' 930\" Cash receipts (from part 2) Less: Cash disbursemenm (from part 4) Change in cash balance during period due to operations Print Sale of marketable securities (1/2/x1) Proceeds from bank loan (1/2/x1) Purchase of equipment Repayment of bank loan (3/31/x1) Interest on bank loan Payment of dividends Change in cash balance during rst quarter Cash balance, 1/1/x1 Cash balance. 3/31/x1 m g G a ezto.mheducation.com Question 6 - Problem 9-44 - Connect Dashboard Problem 9-44 i Saved Help Save & Exit Submit Check my work 6 purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible. 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of each quarter. Part 6 of 9 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. 0.55 points Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. eBook 6. Calculation of required short-term borrowing. Print Projected cash balance as of December 31, 20x0 Less: Minimum cash balance Cash available for equipment purchases Projected proceeds from sale of marketable securities Cash available Less: Cost of investment in equipment Required short-term borrowing Mc Graw G a ezto.mheducation.com Question 8 - Problem 9-44 - Connect Dashboard Problem 9-44 i Saved Help Save & Exit Submit Check my work 8 purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible. 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of each quarter. Part 8 of 9 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. 0.55 points Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. eBook 8. Prepare Intercoastal Electronics' budgeted statement of retained earnings for the first quarter of 20x1. Print INTERCOASTAL ELECTRONICS COMPANY Budgeted Statement of Retained Earnings For the First Quarter of 20x1 Retained earnings, 12/31/x0 Retained earnings, 3/31/x1 Mc Graw Hill G a ezto.mheducation.com Question 9 - Problem 9-44 - Connect Dashboard Problem 9-44 i Saved Help Save & Exit Submit Check my work 9 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. Part 9 of 9 9. Prepare Intercoastal Electronics' budgeted balance sheet as of March 31, 20x1. (Hint: On March 31, 20x1, Bond Interest Payable is $3,000 and Property Taxes Payable is $600.) (Round your answers to the nearest whole dollar.) 0.6 points INTERCOASTAL ELECTRONICS COMPANY Budgeted Balance Sheet March 31, 20x1 eBook Print Total assets Total liabilities and stockholders' equity Mc Graw Hill