Accounting II HW
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Exercise 8-8 Budgeted Income Statement (LO8-9) Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales Selling price per unit Cost per unit Variable selling and administrative expense (per unit) Fixed selling and administrative expense (per year) Interest expense for the year 800 5 2,120 $ 1,390 $ 65 $ 500,000 $ 28,000 Required: Prepare the company's budgeted income statement for the year Gig Harbor Boating Budgeted Income Statement Problem 8-19 Cash Budget; Income Statement; Balance Sheet (LO8-2, LO8-4, LO8-8, LO8-9, LO8-10) Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: Minden Company Balance sheet April 30 Assets Cash accounts receivable Inventory Buildings and equipment, net of depreciation Total aseta Liabilities and Stockholders' Equity Accounts payable Note payable Common tok Retained earnings Total liabilities and stockholders' equity 14,500 72.750 31,750 209.000 $ 320,000 $ 69,500 16,000 180.000 $2,500 5328.000 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $247,000 for May, or these sales, 574100 will be for cash the remainder will be credit sales. One-half of a month's credit soles are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts receivable will be collected in May b. Purchases of inventory are expected to total $172.000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase the remainder are paid in the following month. All of the Aprili 30 accounts payable to suppliers will be paid during May c. The May 31 Inventory balance is budgeted at $58,500 d. Seling and administrative expenses for May are budgeted at $87600, exclusive of depreciation. These expenses will be paid in e. The note payable on the April 30 balance sheet will be paid during May, with $285 in interest. (All of the Interest relates to May) t. New refrigerating equipment costing $13,400 will be purchased for canly during May 9. During May, the company will borrow $22.900 from its bank by giving a new note payable to the bank for that amount. The new cash Depreciation is budgeted at $6,850 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $385 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $13,400 will be purchased for cash during May. g. During May, the company will borrow $22,900 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: 1. Calculate the expected cash collections from customers for May 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May 4. Prepare a budgeted income statement for May. 5. Prepare a budgeted balance sheet as of May 31. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 1. Calculate the expected cash collections from customers for May 2. Calculate the expected cash disbursements for merchandise purchases for May. Total cash collections Total cash disbursements $ 233,300 $ 138,300 Req3 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Req 4 Reg 5 Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.) $ 14,500 233,300 247,800 Minden Company Cash Budget For the Month of May Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchase of inventory Selling and administrative expenses Purchases of equipment Total cash disbursements Excess of cash available over disbursements Financing: Borrowing---note Repayments-noto Interest Total financing Ending cash balance (138,300) (87.600) (13,400) (239,300) 8,500 22,900 (16,000) (385) 6,515 15,015 $ Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Reg 5 Prepare a budgeted income statement for May Minden Company Budgeted Income Statement For the Month of May Sales $ Beginning inventory Gross margin Selling and administrative expenses Net operating income interest expense $ Net Income 247.000 31,750 215.250 (94,450) 120.800 (385) 120.415 Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Reg 4 Reg 5 Prepare a budgeted balance sheet as of May 31. Minden Company Budgeted Balance Sheet May 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets 0 Liabilities and Stockholders' Equity Total liabilities and stockholders' equity $ 0
