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a . Budgeted monthly absorption costing income statements for April - July are: * Includes $ 1 8 , 0 0 0 of depreciation each

a. Budgeted monthly absorption costing income statements for April-July are:
*Includes $18,000 of depreciation each month.
b. Sales are 20% for cash and 80% on account.
c. Sales on account are collected over a three-month period with 10% collected in the month of sale, 80% collected in the first
month following the month of sale, and the remaining 10% collected in the second month following the month of sale. February's
sales totaled $175,000, and March's sales totaled $230,000.
d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of
purchase. The remaining 50% are paid in the following month. Accounts payable at March 31 for inventory purchases during
March total $103,600.
e. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The
merchandise inventory at March 31 is $78,400.
f. Dividends of $26,000 will be declared and paid in April.
g. Land costing $34,000 will be purchased for cash in May.
h. The cash balance at March 31 is $48,000; the company must maintain a cash balance of at least $40,000 at the end of each
month.
i. 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 $200,000. The interest rate on these loans is 1% per month, and for simplicity we
will assume 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:
Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
Prepare a cash budget for April, May, and June as well as in total for the quarter. Required 1
Required 2 A
Required 2B
Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
\table[[Schedule of Expected Cash Collections],[,April,May,June,Quarter],[Cash sales,,,,],[Sales on account:,,,,],[February,,,,],[March,,,,],[April,,,,],[May,,,,],[June,,,,],[Total cash collections,,,,]] Required 1
Required 2A
Required 2B
Required 3
Prepare a cash budget for April, May, and June as well as in total for the quarter.
Note: Cash deficiency, repayments and interest should be indicated by a minus sign.
\table[[Garden Sales, Incorporated],[Cash Budget],[For the Quarter Ended June 30],[,April,May,June,Quarter],[Beginning cash balance],[Add collections from customers],[Total cash available],[Less cash disbursements:],[Purchases for inventory],[Selling expenses],[Administrative expenses],[Land purchases],[Dividends paid],[Total cash disbursements],[Excess (deficiency) of cash available over disbursements],[Financing:],[Borrowings],[Repayment],[Interest],[Total financing],[Ending cash balance,,,,]] Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June.Prepare the following for merchandise inventory, a schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
\table[[Schedule of Expected Cash Disbursements for Merchandise Purchases,],[,April,May,June,Quarter],[,,,,],[April purchases,,,,],[May purchases,,,,],[June purchases,,,,],[Total cash disbursements,,,,]]
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