ACC 2362 Managerial Accounting: Excel Project #3 - Chap. 9 - Master Budget - Merchandising Company

Read these instructions completely before you begin the Excel project.

Academic Honesty:The project should reflect your individual work. Thisis NOTa group project - sharing answers or spreadsheet formats is considered academic dishonesty.If you use a spreadsheet from a prior semester or someone else's spreadsheet, you will receive a zero for the project and an honor code violation will be filed.

Due date:Monday, April 17th at the START of your class period or earlier. If you arrive more than 10 minutes late to class to turn in your project, there will be a 25% penalty. If you turn it in after class has ended, you willNOTreceive credit for the assignment.

Deliverables:Attach a copy of the cover sheet to a printed copy of the completed Excel spreadsheet which will be turned in during your class period. An electronic copy of the Excel spreadsheet only (no cover sheet) will be submitted to TRACS via the Drop Box function in accordance with the due date and time stated above.You will not receive credit unless both the printed copy and electronic copy are turned in by the due date.No hand-written assignments or e-mail attachments will be accepted.

5.Specific Directions:This assignmentwill notbe done through My Accounting Lab. It must be completed using Excel, a spreadsheet application.

Use the Excel Project #3 S17 template as a starting point.If you use a spreadsheet from a prior semester or someone else's spreadsheet, you will receive a zero for the project and an honor code violation will be filed.

First, enter your assumptions from the instruction sheet (Word Document) into the Excel templateAssumptionssheet. This will serve as your data source for all your other cells in Excel template.

No numbers should be entered directly into the Excel template spreadsheet other than what you enter into the assumptions sheet within the Excel Workbook. All calculation cells in the spreadsheet should either be a formula or a cell reference.

All calculations should be performed on the template spreadsheet and not on the assumptions sheet within the Excel workbook.

If the amount from one budget feeds into a subsequent budget, you should reference the budget for the information and not the assumption sheet. Only reference your assumption sheet when referencing the data, the first time. For example, information from the Sales Budget will be referenced on the Cost of Goods Sold Budget, Budgeted Income Statement and Cash Collections Budget.

The budgets should only show each month in the fourth quarter (October, November, & December), and a total for the quarter for every budget except the Balance Sheet. The Balance sheet should only be done at the end of the fourth quarter.

Information for months not part of the fourth quarter should be listed on the assumption sheet. You should reference the assumption sheet when you need to use this information to calculate items needed for the fourth quarter.

Once you have determined how much you need to borrow based on the company's policy you can list this amount on the assumption sheet then reference it on the budget sheet. Assume all funds are borrowed at the end of the month and repaid at the end of the end of the quarter.

You may add rows as needed to display the appropriate headings.

The schedules should be presented in the same order listed under the requirements.

All the budgets should belinkedtogether so that if the sales projection changes, it will automatically change all the subsequent budgets.

You will need to format the budgets and the data on the assumption sheet so it is easily readable & understandable.

You need to format your budget schedules to include underlining, dollar signs and decimal places. Be consistent in your presentation.

Your assignment should be no more than 5 pages total (1 page - cover sheet, 1 page - assumption sheet & 3 pages - budgets) printed portrait on only on one side of the page (no double-sided). Page numbers should be added within Excel.

Grading:Assignment is worth 25 points. Presentation of the information and how easily it can be read will be considered in the grading of the project.

15 points will be for the content, accuracy of the calculations, and completeness.

10 points will be for the use of technology and communication of data.

Lastly, remember, the project is due at the START of your class period.There is normally a backup in the computer lab on the due date with students printing the assignment at the last hourso don't be caught. Remember, there are penalties associated with late work.Don't wait until the last minute to work on it, print out the results to review it for accuracy.Do your own work!

Required: Prepare a master budget for the San Marcos Emporium Company for the fourth quarter of 2017. The following component budgets must be included:

Sales Budget

Cost of Goods Sold, Inventory and Purchases Budget

Operating Expense Budget

Budgeted Income Statement

Schedule of Expected Cash Collections

Schedule of Expected Cash Disbursements - Merchandise Purchases

Schedule of Expected Cash Disbursements - Operating Expenses

Combined Cash Budget

Budgeted Balance Sheet

ACC 2362 Managerial Accounting: Excel Project #3 - Chap. 9 - Master Budget - Merchandising Company

The San Marcos Emporium Company is a merchandising business located downtown in San Marcos, Texas. The owners are Texas State alumni and they would like to maximize their profits. They understand that accurate budgeting will help obtain this goal. The company is completing its third year of operations and is preparing to build its master budget for the fourth quarter of the year. The budget will detail each month's activity and the total for the quarter. The master budget will be based on the following information:

Sales were budgeted at $202,000 for September. Expected sales are $208,000 for October, $207,000 for November, $210,000 for December, and $204,000 for January 2018.

The gross margin is 40% of sales.

Sales are projected to be 80% in cash and 20% on credit. Credit sales are collected in the month following the sale. The September accounts receivable are a result of the September credit sales. There are no bad debts.

Each month's ending inventory should equal 75% of the next month's budgeted cost of goods sold.

Merchandise Inventory Purchases are paid as follows; 85% of a month's inventory purchases are paid for in the month of purchase; the remaining 15% is paid for in the following month. The accounts payable at September 30 are the result of September purchases of inventory.

Monthly operating expenses are as follows: commissions are 10% of sales; rent is $3,000 per month, other operating expenses (excluding depreciation) are 15% of sales. Assume these expenses are paid in cash each month. Deprecation is $1,500 per month.

November equipment purchases cost $8,000, and December equipment purchases cost $3,000. All equipment purchases are paid for in cash in the month purchased.

Income tax is estimated to be 28% of operating income. Estimated taxes are accrued each month and paid in cash in the last month of the quarter.

Management would like to maintain a minimum cash balance of at least $50,000 at the end of each month. The company has an agreement with a local bank that allows them to borrow in increments of $1,000 at the end of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded (only paying interest on the principal). They would, as far as it is able, repay the loan plus accumulated interest in the last month of the quarter.

The projected balance sheet as of September 30, is as follows:

F XC Home Insert Page Layout Formulas Data Review View Calibri (Body) 11 A- A So Wrap Text Paste B I U. A E Merge & C B35 X V fx =Assumptions!E10*Assumptions!E4 A B C D E F October November December Quarter WNH Budgeted Sales Revenue $ 208,000.00 $ 207,000.00 $ 210,000.00 $ 625,000.00 Cash Sales $ 166,400.00 $ 165,600.00 $ 168,000.00 $ 500,000.00 Credit Sales $ 41,600.00 $ 41,400.00 $ 42,000.00 $ 125,000.00 Total Sales Revenue $ 208,000.00 $ 207,000.00 $ 210,000.00 $ 625,000.00 $ 625,000.00 Budgeted Cost of Goods Sold $ 124,800.00 $ 124,200.00 $ 126,000.00 $ 375,000.00 Desired Ending Inventory $ 93,150.00 $ 94,500.00 $ 91,800.00 $ 91,800.00 10 Total Needs $ 217,950.00 $ 218,700.00 $ 217,800.00 $ 466,800.00 11 Beginning Inventory $ 93,600.00 $ 93,150.00 $ 94,500.00 $ 93,600.00 12 Required Purchases $ 124,350.00 $ 125,550.00 $ 123,300.00 $ 373,200.00 $ 373,200.00 13 14 Variable Operating Expenses: 15 Commissions $ 20,800.00 $ 20,700.00 $ 21,000.00 $ 62,500.00 16 Other Operating Expenses $ 31,200.00 $ 31,050.00 $ 31,500.00 $ 93,750.00 17 Total Variable Operating Expenses $ 52,000.00 $ 51,750.00 $ 52,500.00 $ 156,250.00 $ 156,250.00 18 Fixed Operating Expenses: 19 Rent 3,000.00 $ 3,000.00 $ 3,000.00 $ 9,000.00 20 Depreciation 1,500.00 $ 1,500.00 5 1,500.00 $ 4,500.00 21 Total Fixed Operating Expenses 4,500.00 4,500.00 4,500.00 $ 13,500.00 22 Total Operating Expense $ 56,500.00 $ 56,250.00 $ 57,000.00 $ 169,750.00 $ 169,750.00 23 24 Sales $ 208,000.00 $ 207,000.00 $ 210,000.00 $ 625,000.00 25 Cost of Goods Sold $ 124,800.00 $ 124,200.00 $ 126,000.00 $ 375,000.00 26 Gross Margin 83,200.00 $ 82,800.00 $ 84,000.00 $ 250,000.00 27 Operating Expenses $ 56,500.00 $ 56,250.00 $ 57,000.00 $ 169,750.00 28 Operating Income $ 26,700.00 $ 26,550.00 5 27,000.00 5 80,250.00 29 Interest Expense 30 Income Taxes $ 7,476.00 $ 7,434.00 $ 7,560.00 $ 22,470.00 31 Net Income 32 33 Collections of: 34 Cash Sales $ 166,400.00 $ 165,600.00 $ 168,000.00 $ 500,000.00 35 Credit Sales $ 40,400.00 | $ 41,600.00 $ 41,400.00 $ 42,000.00 36 Total Collections $ 206,800.00 $ 207,200.00 $ 209,400.00 $ 542,000.00 $ 542,000.00 37 38 PavmHD. C Home Insert Page Layout Formulas Data Review View Calibri (Body) 11 A- A 30 Wrap Text Paste BI U + Merge & C B35 X V fx =Assumptions!E10* Assumptions!E4 A B C D E F 32 33 Collections of: 34 Cash Sales $ 166,400.00 $ 165,600.00 $ 168,000.00 $ 500,000.00 35 Credit Sales $ 40,400.00 $ 41,600.00 $ 41,400.00 $ 42,000.00 36 Total Collections 5 206,800.00 $ 207,200.00 $ 209,400.00 $ 542,000.00 |$ 542,000.00 37 38 Payments of: 39 Current Month Purchases $ 105,697.50 $ 106,717.50 $ 104,805.00 $ 317,220.00 40 Prior Month Purchases $ 18,585.00 $ 18,652.50 $ 18,832.50 $ 18,495.00 41 Total Payments - Merchandise Inventory Purchases $ 124,282.50 $ 125,370.00 $ 123,637.50 $ 335,715.00 $ 335,715.00 42 43 Commissions $ 20,800.00 $ 20,700.00 $ 21,000.00 $ 62,500.00 44 Rent $ 3,000.00 $ 3,000.00 $ 3,000.00 $ 9,000.00 45 Other Operating Expenses $ 31,200.00 $ 31,050.00 $ 31,500.00 $ 93,750.00 Total Payments - Operating Expenses 55,000.00 $ 54,750.00 $ 55,500.00 $ 165,250.00 $ 165,250.00 47 48 Beginning Cash Balance $ 12,000.00 $ 56,602.50 5 92,835.00 $ 129,870.00 49 Cash Collections $ 206,800.00 $ 207,200.00 $ 209,400.00 $ 542,000.00 50 Cash Available $ 218,800.00 $ 263,802.50 $ 302,235.00 5 671,870.00 51 Cash Payments: $ 55,000.00 $ 54,750.00 $ 55,500.00 $ 165,250.00 52 Merchandise Inventory Purchases $ 105,697.50 $ 105,717.50 $ 104,805.00 $ 317,220.00 53 Operating Expenses $ 56,500.00 $ 56,250.00 $ 57,000.00 $ 169,750.00 54 Equipment Purchase $ 8,000.00 3,000.00 55 Income Taxes 7,560.00 $ 7,560.00 56 Ending Cash Balance before Financing $ 56,602.50 $ 92,835.00 $ 129,870.00 $ 177,340.00 $ 177,340.00 57 58 New Borrowing's $ (6,602.50) 59 Debt Repayments 60 Interest Payments 61 Ending Cash Balance after Financing 62 63 Cash Accounts Receivable 65 Inventory 66 Plant & Equipment, net 67 Total assets 68 59 Accounts PayableHome Insert Page Layout Formulas Data Review Calibri (Body) 11 A- A L Paste B I U A 858 X V fx A B C D 57 58 New Borrowings 59 Debt Repayments 60 Interest Payments 61 Ending Cash Balance after Financing 62 63 Cash 64 Accounts Receivable 65 Inventory 66 Plant & Equipment, net 67 Total assets 68 69 Accounts Payable 70 Retained Earnings 71 Total liabilities & equity 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93Home Insert Page Layout Formulas Data Review Calibri (Body) 17 A- A Paste B I U A Q37 x v fx A B C D E F G H Assumptions - San Marcos Emporium Expected Sales: September $ 202,000.00 October $ 208,000.00 November 5 207,000.00 7 December $ 210,000.00 January $ 204,000.00 9 10 Credit Sales 20% 11 Cash Sales 80% 12 13 Gross Margin of sales 40% 14 OGS of sales 60% 15 DEI of next month's CGS 75% 16 17 Operating Expenses: 18 Commissions of sales 10% 19 Other Operating Expen of sales 15% 20 Rent $ 3,000.00 Depreciation $ 1,500.00 22 23 Income Tax Rate of Operating Income 28%% 24 25 Inventory Purchases: paid in month of purchase 85% 26 paid in month following the purchase 15% 27 28 Equipment Purchases 29 November 8,000.00 30 December 3,000.00 31 32 New Borrowings Need to have at least: $ 50,000.00 33 (I's OK to determine how much you need to borrow and enter it the assumption sheet) 34 October 35 36 Loan Interest Rate per month 1% 37 38 Assets 5 267.750.00 Assumptions Template Sheet3 + ReadyHome Insert Page Layout Formulas Data Review X Calibri (Body) 11 A- A Paste B I U A Q37 X v fx A B C D E F G H 30 December $ 3,000.00 31 32 New Borrowings Need to have at least: $ 50,000.00 33 (I's OK to determine how much you need to borrow and enter it the assumption sheet) 34 October 35 36 Loan Interest Rate per month 1%% 37 38 Assets $ 267,750.00 39 Cash 5 12,000.00 40 Accounts Receivable 5 40,400.00 41 Inventory $ 93,600.00 42 Plant & Equipment, net $ 121,750.00 43 14 Liabilities & Equity 5 267,750.00 Accounts Payable $ 18,585.00 46 Retained Earnings $ 249,165.00 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 66 67 Assumptions Template Sheet3 + ReadyAssets September 30 Cash $12,000.00 Accounts Receivable 40,400.00 Inventory 93,600.00 Plant & Equipment, net 121,750.00 Total assets $267,750.00 Liabilities & Equity Accounts Payable $18,585.00 Retained Earnings 249,165.00 Total liabilities & equity $267,750.00