8-31 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office suppites specialty store, prepares its master budget on a quarterly basis. The following dists have been assembled to assist in preparing the master budget for the first quarter: As of December 31 ahe end of the prior quarter), the company's general ledger showed the following account balances Cash Accounts receivable Inventory dings and exp Accounts payable Retained earning $55,000 212,000 60,000 345,000 $89,625 180.17 602,000 $600,000 b. Actual sales for December and budgeted sales for the next four months are as follows: Decanter (actual) January Hary $265,000 $400,000 $313,000 c Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sele. The accounts receivable at December 31 are a result of December credit sales d. The company's gross margin is 40% of sales. in other words, cost of goods sold is 60% of sales) e Monthly expenses are budgeted as follows: salaries and wages, $30,000 per month: advertising, $66,000 per month: shipping, 5% of sales; other expenses. 3% of sales. Depreciation, Including depreciation on new assets acquired during the quarter, will be $44,500 for the quarter Each month's ending inventory should equal 25% of the following month's cost of goods sold 9 One-half of a month's inventory purchases is paid for in the month of purchase, the other half is paid in the following month During February, the company will purchase a new copy machine for $2,500 cash. During March, other equipment will be purchased for cash at a cost of $77,500 During January, the company will declare and pay $45,000 in cash dividends. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in Increments of $1000 at the beginning of each month. 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 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 first quarter 1. Schedule of expected cash collections 2. Merchandise purchases budget 26. Schedule of expected cash disbursements for merchandise purchases 3. Cash budget 4. Prepare an absorption couting Income statement for the quarter ending March 31 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. 2 3 Complete the Schedule of expected cash collections: Credes Tootections Bobenue of Expects Cash Collections January February Marsh Quarter 80.000 212,000 $292.000 Required 2A > 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 28 Required 3 Required 4 Required 5 Complete the merchandise purchases budget: Merchandise Purchases Budget January February March Quarter Budgeted cost of goods sold $240.000 $ 358,200 Add desired ending inventory 89,550 Total needs 329,550 Less beginning inventory 80.000 Required purchases $ 269,550 $400,000 sales x60% cost ratio $240,000 +3358,200x25% $80.550 Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 25 Required 3 Required 4 Required S December purchases January purchases Complete the schedule of expected cash disbursements for merchandise purchases. Schedule of Expected Cash Disbursements for Merchandise Purchases January February March $ 89,025 134,776 134,775 Quarter February purchases March purchases Total cash disbursements for purchases Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 31 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Hillyard Company Cash Budget January February March Quarter Beginning cash balance S 55,000 Add collections from customers 292,000 Total cash available Less cash disbursements: Inventory purchases 224,400 Selling and administrative expenses 128,000 Equipment purchases Cash dividends Total cash disbursements 45,000 397.400 Excess (deficiency) of cash Financing: Borrowings Repayments Interest Total financing Ending cash balance Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required S Prepare an absorption costing income statement for the quarter ending March 31. Hillyard Company Income Statement For the Quarter Ended March 31 Cost of goods sold Selling and administrative expenses Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required S Prepare a balance sheet as of March 31. Current assets Total current assets Total assets Hillyard Company Balance Sheet March 31 Assets Current liabilities Liabilities and Stockholders' Equity Stockholders' equity Total liabilities and stockholders' equity Problem 8-31 (Algo) Completing a Master Budget (LO8-2, LO8-4, LOS-7, LO8-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter a. As of December 31 (the end of the prior quarter, the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $55,000 212,000 60,000 365.000 $89,625 500,000 102,375 5092,000 5092,000 b. Actual sales for December and budgeted sales for the next four months are as follows December(actual) January February March April $265,000 $400,000 $ 507,000 $312,000 $208,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales e Monthly expenses are budgeted as follows: salaries and wages, $30,000 per month advertising. $66.000 per month shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,500 for the quarter Each month's ending inventory should equal 25% of the following month's cost of goods sold g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month h. During February, the company will purchase a new copy machine for $2.500 cash. During March, other equipment will be purchased for cash at a cost of $77,500 During January, the company will declare and pay $45,000 in cash dividends J. Management wants to maintain a minimum cash balance of $30,000. 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. The interest rate on these loans is the 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 first quarter 1. Schedule of expected cash collections: 2-a Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases 3. Cash budget 4. Prepare an absorption costing income statement for the quarter ending March 31 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Required Required 28 Required 28 Required 3 Required t Complete the Schedule of expected cash collections Schedule of Expected Cash Collections January February March Quarter Cash sales Credit sales Total collections $ 00,000 212.000 $ 290,000 $ S 03 00,000 212,000 0$ 292.000 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 41 Required 5 Complete the merchandise purchases budget: Budgeted cost of goods sold Add desired ending inventory Total needs Less beginning inventory Merchandise Purchases Budget January February March Quarter $240,000 $ 358,200 89.5501 329.550 358,200 0 0 60,000 $ 250.550 $ 358,200 $ 0 $ 0 Required purchases $400,000 sales x 60% cost ratio 3240,000 15358,200x25%-$80.550 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required 5 Complete the schedule of expected cash disbursements for merchandise purchases. Schedule of Expected Cash Disbursements for Merchandise Purchases December purchases January purchases February purchases March purchases January February March $ 89.825 Quarter $ 80.625 134.775 134.775 209,550 0 $224,400 $134,775 $ 0 $ 350.176 Total cash disbursements for purchases Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required S Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Hillyard Company Cash Budget January February March Quarter Beginning cash balance S 55,000 Add collections from customers 292,000 Total cash available 347,000 0 0 Less cash disbursements Inventory purchases 224,400 Selling and administrative expenses 128,000 Equipment purchases Cash dividends 45,000 Total cash disbursements 397,400 Excess (deficiency) of cash (50,400) Financing: Borrowings Repayments Interest Total financing Ending cash balance 0 S (50,400) $ 05 0 S 0 < Required 28 Required 4> Required: Using the data above, complete the following statements and schedules for the first quarter. 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget 4. Prepare an absorption costing Income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ending March 31. Hillyard Company Income Statement For the Quarter Ended March 31 Cost of goods sold Selling and administrative expenses 0 0 0 S 0 Required: Using the data above, complete the following statements and schedules for the first quarter. 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget 4. Prepare an absorption costing Income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required 5 Prepare a balance sheet as of March 31. Current assets: Hillyard Company Balance Sheet March 31 Assets Total current assets Total assets Current liabilities: Liabilities and Stockholders' Equity Stockholders' equity 0 $ 0 Total liabilities and stockholders' equity $ 0 0 < Required 4 Respons Problem 8-31 (Algo) Completing a Master Budget (LO8-2, LO8-4, LO8-7, LOS-8, LO8-9, LO8-10] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter. a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Connon stock Retained earnings $ 55,000 212,000 60,000 365,000 $ 89,625 500,000 102,375 $ 692,000 $ 692,000 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March April $ 265,000 $ 400,000 $ 597,000 $ 312,000 $ 208,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March April $ 265,000 $ 400,000 $ 597,000 $ 312,000 $208,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $30,000 per month: advertising. $66,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, Including depreciation on new assets acquired during the quarter, will be $44,500 for the quarter. f. Each month's ending Inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's Inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,500 cash. During March, other equipment will be purchased for cash at a cost of $77,500. L During January, the company will declare and pay $45,000 in cash dividends. J. Management wants to maintain a minimum cash balance of $30,000. 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. 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 first quarter 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget 4. Prepare an absorption costing Income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31