Accounting $102$ Budget Project

Hitchen$$s Widget store Part $2$

Using Hitchen$$s info from the income statement budgets $($part $1),$ the remaining account info is presented to prepare the components of the balance sheet budgets. Assume the same budget is expected for the next three months $($July$,$ Aug, Sept$).$

$1.$ Opening July $1$ cash balance is $$601,000.$

$2.$ A$/$R beginning balance of $$2,175,000$ was $69\%$ collected in July and the remaining $31\%$ in August.

$3.$ Sales: $30\%$ collected in month of sale, $50\%$ the following month, and $20\%$ in the third month.

$4.$ A$/$P opening balance of $$295,000$ was paid $70\%$ this month and $30\%$ next month.

$5.$ Direct Materials are paid $30\%$ during month of purchase, $50\%$ the following month, and $20\%$ the third month.

$6.$ W$/$P had an opening balance of $$221,000$ and paid off this month

$7.$ Direct Labor is paid $74\%$ this month and the remaining in the following month.

$8.$ Factory Overhead & Selling$/$Admin is paid $100\%$ this month $($excluding Depreciation$)$

$9.$ Dividends are expected to be paid of $$179,500,$ $$240,000,$ and $$260,000$ in the three months respectively

$10.$ Plans are in place to purchase a piece of equipment for $$123,500$ in month $1(10\%$ paid this month, $40\%$ paid in month $2$ and the remaining $50\%$ in month $3).$

a$.$ Retired Asset expected to sell for $$16,250$ and collected $100\%$ in the second month.

$11.100\%$ of income tax is paid each month

$12.$ Beginning balances:

a$.$ Equipment $=2,164,000$

b$.$ Accum. Dep. Equipment $=1,256,000$

c$.$ Common Stock $=$ $$2,500,000$

d$.$ Retained Earnings $=$ $$1,206,319$

Prepare these following budgets for month one, two and three.

$1.$ Schedule of cash collections from customers

$2.$ Schedule of cash payments for D$.$M$.$

$3.$ Schedule of cash payments for D$.$L$.$

$4.$ Cash Budget

$5.$ Budgeted balance sheet $($as of month $1)$

Hitchen's Widget Store $-$ Part $2$

$\%$collected month $1$

Cash Collections $\%$collected month $2$

Sales$/$opening bal. July Aug. Sept. $\%$collected month$3$

A$/$R

July A$/$R collected month $1$

Aug. A$/$R collected month $2$

Sept

Total cash collections

DM Cash Payments $\%$paid month $1$

Purchases$/$opening bal. July Aug. Sept. $\%$paid month $2$

A$/$P $\%$paid month $3$

July

Aug.

Sept

Total DM payments

DL Cash Payments $\%$paid month $1$

Accrued$/$opening bal. July Aug. Sept. $\%$paid month $2$

W$/$P

July

Aug.

Sept

Total DL payments

Cash Budget July Aug. Sept.

Beg. Cash

Add: Collections from Cust.

Collections from sale

of asset

Total avail. Cash

Less: Direct material Purchase of Equip.

Direct Labor $\%$paid month $1$

Factory Overhead $\%$paid month $2$

Selling and Admin $\%$paid month $3$

Purchase of Machine

Dividend

Income Tax Exp.

Total cash payments

Ending Cash Bal.

Hutchin's Store

Budgeted Balance Sheet

As of July $31,20$XX

Current Assets Sub total Total Grand Total

Cash

A$/$R

Finished Goods Inv.