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. This is NOT a group project sharing answers or spreadsheet formats is considered academic dishonesty. If you use a spreadsheet from a prior semester or someone elses spreadsheet, you will receive a zero for the project and an honor code violation will be filed.

Due date: Friday, April 14th 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 will NOT receive 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 assignment will not be 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 elses 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 template Assumptions sheet. 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 companys 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 be linked together 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 hour so dont be caught. Remember, there are penalties associated with late work. Dont 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 months 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 months ending inventory should equal 75% of the next months budgeted cost of goods sold.

Merchandise Inventory Purchases are paid as follows; 85% of a months 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:

Assets	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

Assumptions - San Marcos Emporium
Expected Sales:
September
October
November
December
January
Credit Sales
Cash Sales
Gross Margin		of sales
CGS		of sales
DEI		of next month's CGS
Operating Expenses:
Commissions		of sales
Other Operating Expense		of sales
Rent
Depreciation
Income Tax Rate		of Operating Income
Inventory Purchases:		paid in month of purchase
		paid in month following the purchase
Equipment Purchases
New Borrowings
(I's OK to determine how much you need to borrow and enter it the assumption sheet)
October
Loan Interest Rate		per month
Assets
Cash
Accounts Receivable
Inventory
Plant & Equipment, net
Liabilities & Equity
Accounts Payable
Retained Earnings

TEMPLATE

	October	November	December	Total
Budgeted Sales Revenue
Cash Sales
Credit Sales
Total Sales Revenue
Budgeted Cost of Goods Sold
Desired Ending Inventory
Total Needs
Beginning Inventory
Required Purchases
Variable Operating Expenses:
Commissions
Other Operating Expenses
Total Variable Operating Expenses
Fixed Operating Expenses:
Rent
Depreciation
Total Fixed Operating Expenses
Total Operating Expense
Sales
Cost of Goods Sold
Gross Margin
Operating Expenses
Operating Income
Interest Expense
Income Taxes
Net Income
Collections of:
Cash Sales
Credit Sales
Total Collections
Payments of:
Current Month Purchases
Prior Month Purchases
Total Payments - Merchandise Inventory Purchases
Commissions
Rent
Other Operating Expenses
Total Payments - Operating Expenses
Beginning Cash Balance
Cash Collections
Cash Available
Cash Payments:
Merchandise Inventory Purchases
Operating Expenses
Equipment Purchase
Income Taxes
Ending Cash Balance before Financing
New Borrowings
Debt Repayments
Interest Payments
Ending Cash Balance after Financing
Cash
Accounts Receivable
Inventory
Plant & Equipment, net
Total assets
Accounts Payable
Retained Earnings
Total liabilities & equity