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Activity-Based Budgeting St. Sophia's Hospital is preparing its budget for the coming year. It uses an activity-based approach for all costs except physician care. Its

Activity-Based Budgeting

St. Sophia's Hospital is preparing its budget for the coming year. It uses an activity-based approach for all costs except physician care. Its emergency room has three activity areas with cost drivers as follows:

1.Receptionpaperwork of incoming patients. Cost driver is the number of forms completed.

2.Treatmentinitial diagnosis and treatment of patients. Cost driver is the number of diagnoses treated.

3.Cleaninggeneral cleaning plus preparing treatment facilities for next patient. Cost driver is the number of people visiting emergency room (patients plus person(s) accompanying them).

Budgeted Amount of Cost DriverActiviy AreaCost Driver RatesOutpatientsAdmitted PatientsReception$ 618,400 forms6,500 formsTreatment1218,000 diagnoses5,400 diagnosesCleaning227,400 people3,400 people

a. Create the total budgeted cost for each activity.

Activity Cost BudgetReceptionTreatmentCleaningOutpatients$Answer

$Answer

Admitted PatientsAnswer

Answer

Total$Answer

$Answer

QUESTION2Not completePoints out of 4.00Flag question

Question text

Cash Receipts

The sales budget for Andrew Inc. is forecasted as follows:

MonthSales RevenueMay$ 170,000June210,000July230,000August170,000

To create a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales:

50 percent in the month of sale.
25 percent in the month following sale.
20 percent in the second month following sale.
5 percent uncollectible.

The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $34,000, of which $10,000 represents uncollected March sales and $24,000 represents uncollected April sales.

Create a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.

Andrew, Inc.

Schedule of Budgeted Cash Collections

Quarterly by MonthsMayJuneJulyTotalTotal Cash receipts:$Answer

$Answer

QUESTION3Not completePoints out of 45.00Flag question

Question text

Purchases and Cash Budgets

On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable of $99,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are:

MonthActual SalesMonthBudgeted SalesMay$150,000July$ 90,000June160,000August80,000September100,000October120,000

All sales are on credit with 75 percent collected during the month of sale, 20 percent collected during the next month, and 5 percent collected during the second month following the month of sale. Cost of goods sold averages 70 percent of sales revenue. Ending inventory is one-half of the next month's predicted cost of sales. The other half of the merchandise is acquired during the month of sale. All purchases are paid for in the month after purchase. Operating costs are estimated at $28,000 each month and are paid during the month incurred.

Required

Prepare purchases and cash budgets for July, August, and September.

Do notuse a negative sign with your answers.

MTC WholesalersPurchases BudgetFor the Months of July, August, and SeptemberJulyAugustSeptemberInventory required, current sales$Answer

$Answer

Desired ending inventoryAnswer

Answer

Total inventory needsAnswer

Answer

Less beginning inventoryAnswer

Answer

Purchases$Answer

$Answer

Do notuse a negative sign with your answers.

MTC WholesalersCash BudgetFor the Months of July, August, and SeptemberJulyAugustSeptemberCash balance, beginning$Answer

$Answer

Cash receiptsCurrent month's salesAnswer

Answer

Previous month's salesAnswer

Answer

Sales two months priorAnswer

Answer

Total receiptsAnswer

Answer

Cash availableAnswer

Answer

Cash disbursements:PurchasesAnswer

Answer

Operating costsAnswer

Answer

Total disbursementsAnswer

Answer

Cash balance, ending$Answer

$Answer

QUESTION4Not completePoints out of 18.00Flag question

Question text

Production and Purchases Budgets

At the beginning of October, Comfy Cushions had 1,600 cushions and 10,500 pounds of raw materials on hand. Budgeted sales for the next three months are:

MonthSalesOctober8,000 cushionsNovember10,000 cushionsDecember13,000 cushions

Comfy Cushions wants to have sufficient raw materials on hand at the end of each month to meet 25 percent of the following month's production requirements and sufficient cushions on hand at the end of each month to meet 20 percent of the following month's budgeted sales. Five pounds of raw materials, at a standard cost of $0.90 per pound, are required to produce each cushion.

Required

a. Create a production budget for October and November.

Do notuse a negative sign with your answers.

Comfy CushionsProduction BudgetFor the Months of October and NovemberOctoberNovemberDecemberUnit SalesAnswer

Answer

Desired ending inventoryAnswer

Answer

Finished goods requirementsAnswer

Answer

Less beginning inventoryAnswer

Answer

Production requirementsAnswer

Answer

b. Create a purchases budget in units and dollars for October.

Do notuse a negative sign with your answers.

Comfy CushionsPurchases BudgetFor the Month of OctoberOctoberNovemberProduction requirementsAnswer

Answer

Desired ending inventoryAnswer

Raw materials requirementsAnswer

Less beginning inventoryAnswer

Purchase requirements (units)Answer

Purchase requirements (in dollars)$Answer

QUESTION5Not completePoints out of 15.00Flag question

Question text

Cash Disbursement

Timber Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Lumber purchases and payments are to be made during the month preceding the month of sale. Wages are estimated at 15 percent of sales and are paid during the month of sale. Other operating costs amounting to 10 percent of sales are to be paid in the month following the month of sale. Additionally, a monthly lease payment of $14,000 is paid for computer services. Sales revenue is forecast as follows

MonthSales RevenueFebruary$170,000March210,000April220,000May260,000June240,000July280,000

Required

Create a schedule of cash disbursements for April, May, and June.

Do notuse a negative sign with your answers.

Timber CompanySchedule of Cash DisbursementsApril, May, and JuneAprilMayJuneLumbers purchases$Answer

$Answer

WagesAnswer

Answer

Operating expensesAnswer

Answer

Lease paymentAnswer

Answer

Total disbursements$Answer

$Answer

QUESTION6Not completePoints out of 10.00Flag question

Question text

Purchases Budget in Units and Dollars

Budgeted sales of Wirtz Music Shop for the first six months of 2017 are as follows:

MonthUnit SalesMonthUnit SalesJanuary155,000April240,000February185,000May205,000March225,000June265,000

Beginning inventory for 2017 is 35,000 units. The budgeted inventory at the end of a month is 40 percent of units to be sold the following month. Purchase price per unit is $5.

Create a purchases budget in units and dollars for each month, January through May.

WIRTZ MUSIC SHOP

Purchases Budget

January - May, 2017JanuaryFebruaryMarchAprilMayPurchase units:Answer

Answer

Purchase dollars:$Answer

$Answer

QUESTION7Not completePoints out of 15.00Flag question

Question text

Cash Budget

Patrick's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:

MonthSales RevenueMonthSales RevenueJanuary$ 350,000March$ 250,000February300,000April200,000

All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 80 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $52,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $35,000.

Prepare monthly cash budgets for February, March, and April.

Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.

Patrick's Retail Company

Cash Budgets

February, March, and AprilFebruaryMarchAprilCash balance, beginning$Answer

$Answer

Total Cash receiptsAnswer

Answer

Cash availableAnswer

Answer

Total disbursementsAnswer

Answer

Cash balance, ending$Answer

$Answer

QUESTION8Not completePoints out of 18.00Flag question

Question text

Cash Budget

The Williams Supply Company sells for $40 one product that it purchases for $25. Budgeted sales in total dollars for next year are $1,400,000. The sales information needed for preparing the July budget follows:

MonthSales RevenueMay$ 34,000June48,000July56,000August64,000

Account balances at July 1 include these:

Cash$ 24,000Merchandise inventory17,500Accounts receivable (sales)25,760Accounts payable (purchases)16,250

The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $210,000 , of which one-half is fixed expense (inclusive of a $21,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.)

(a) Create a schedule of estimated cash collections for July.

WilliamsSupply Company

Schedule of Cash Collections

For the Month of JulyCurrent month's sales$Answer

Previous month's sales$Answer

Two months' prior sales$Answer

Total cash collections$Answer

(b) Create a schedule of estimated July cash payments for purchases. For this, perform your calculation using units rounding up to the nearest whole unit. Then convert to dollars for your answer.

WilliamsSupply Company

Schedule of Cash Payments for Purchases

For the Month of JulyCurrent month's purchases$Answer

Beginning accounts payableAnswer

Total cash payments$Answer

(c) Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements.

WilliamsSupply Company

Schedule of Selling and Administrative Expenses and Cash Disbursements

For the Month of JulyTotalCashSelling and administrative expenses:Fixed$Answer

Cash payment$Answer

VariableAnswer

Answer

Total expenses and cash disbursements$Answer

$Answer

(d) Create a cash budget in summary form for July.

Do not use negative signswith any answers below.

WilliamsSupply Company

Cash Budget

For the Month of JulyCash receipts$Answer

Cash disbursements:Merchandise$Answer

Selling and administrativeAnswer

Answer

Excess receipts (disbursements)$Answer

QUESTION9Not completePoints out of 101.00Flag question

Question text

Developing a Master Budget for a Merchandising Organization

Dils Brother Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2017.

Dils Brother Department Store

Balance Sheet

March 31, 2017AssetsLiabilities and Stockholders' EquityCash$4,000Accounts payable

$31,000Accounts receivable31,000Dividends payable

15,000Inventory36,000Rent payable

3,000Prepaid Insurance3,000Stockholders' equity

50,000Fixtures25,000Total assets$99,000Total liabilities and equity

$99,000

Actual and forecasted sales for selected months in 2017 are as follows:

MonthSales RevenueJanuary$ 70,000February60,000March50,000April60,000May70,000June80,000July100,000August90,000

Monthly operating expenses are as follows:

Wages and salaries$ 27,000Depreciation100Utilities1,500Rent3,000

Cash dividends of $15,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's cost of sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $4,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.

(a) Create a purchases budget for each month of the second quarter ending June 30, 2017.

Dils Brothers Department Store

Monthly Purchase Budget

Quarter Ending June 30, 2017AprilMayJuneTotalBudgeted purchases$Answer

$Answer

(b) Create a cash receipts schedule for each month of the second quarter ending June 30, 2017. Do not include borrowings.

Dils BrothersDepartment Store

Schedule of Monthly Cash Receipts

Quarter Ending June 30, 2017AprilMayJuneTotalTotal cash receipts$Answer

$Answer

(c) Create a cash disbursements schedule for each month of the second quarter ending June 30, 2017. Do not include repayments of borrowings.

Dils BrothersDepartment Store

Schedule of Monthly Cash Disbursements

Quarter Ending June 30, 2017AprilMayJuneTotalTotal cash disbursements$Answer

$Answer

(d) Create a cash budget for each month of the second quarter ending June 30, 2017. Include budgeted borrowings and repayments.

Only use negative signs, if needed, for:excess receipts over disbursements, balance before borrowings andcash balances (beginning and ending).

Dils BrothersDepartment

Store Monthly Cash Budget

Quarter Ending June 30, 2017AprilMayJuneTotalCash balance, beginning$Answer

$Answer

ReceiptsAnswer

Answer

DisbursementsAnswer

Answer

Excess receipts over disb.Answer

Answer

Balance before borrowingsAnswer

Answer

BorrowingsAnswer

Answer

Loan repaymentsAnswer

Answer

Cash balance, ending$Answer

$Answer

(e) Create an income statement for each month of the second quarter ending June 30, 2017.

Only usenegative signsto shownet losses for income.

Dils BrothersDepartment Store

Budgeted Monthly Income Statements

Quarter Ending June 30, 2017AprilMayJuneTotalSales$Answer

$Answer

Cost of salesAnswer

Answer

Gross profitAnswer

Answer

Operating expenses:Wages and salariesAnswer

Answer

DepreciationAnswer

Answer

UtilitiesAnswer

Answer

RentAnswer

Answer

InsuranceAnswer

Answer

InterestAnswer

Answer

Total expensesAnswer

Answer

Net income$Answer

$Answer

(f) Create a budgeted balance sheet as of June 30, 2017.

Dils BrothersDepartment Store

Budgeted Balance Sheet

June 30, 2017AssetsLiabilities and EquityCash$Answer

Merchandise payable$Answer

Accounts receivableAnswer

Dividend payableAnswer

InventoryAnswer

Rent payableAnswer

Prepaid insuranceAnswer

Loans payableAnswer

FixturesAnswer

Interest payableAnswer

Total assets$Answer

Stockholders' equityAnswer

Total liab. & equity$Answer

Activity-Based Budgeting St. Sophia's Hospital is preparing its budget for the coming year. It uses an activity-based approach for all costs except physician care. Its emergency room has three activity areas with cost drivers as follows: 1. Receptionpaperwork of incoming patients. Cost driver is the number of forms completed. 2. Treatmentinitial diagnosis and treatment of patients. Cost driver is the number of diagnoses treated. 3. Cleaninggeneral cleaning plus preparing treatment facilities for next patient. Cost driver is the number of people visiting emergency room (patients plus person(s) accompanying them). Budgeted Amount of Cost Driver Activiy Area Cost Driver Rates Reception $ 61 8,400 forms 6,500 forms Treatment 121 8,000 diagnoses 5,400 diagnoses Cleaning Outpatients 22 Admitted Patients 7,400 people 3,400 people a. Prepare the total budgeted cost for each activity. Activity Cost Budget Reception Treatment Cleaning $Answer $Answer $Answer Answer Answer Answer $Answer $Answer $Answer Outpatients Admitted Patients Total QUESTION 2 Not complete Points out of 4.00 Flag question Question text Cash Receipts The sales budget for Andrew Inc. is forecasted as follows: Month Sales Revenue May $ 170,000 June 210,000 July 230,000 August 170,000 To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales: 50 percent in the month of sale. 25 percent in the month following sale. 20 percent in the second month following sale. 5 percent uncollectible. The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $34,000, of which $10,000 represents uncollected March sales and $24,000 represents uncollected April sales. Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections. Andrew, Inc. Schedule of Budgeted Cash Collections Quarterly by Months May June July Total $Answer $Answer $Answer $Answer Total Cash receipts: QUESTION 3 Not complete Points out of 45.00 Flag question Question text Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable of $99,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are: Month Actual Sales May $150,000 July June Month 160,000 August Budgeted Sales $ 90,000 80,000 September 100,000 October 120,000 All sales are on credit with 75 percent collected during the month of sale, 20 percent collected during the next month, and 5 percent collected during the second month following the month of sale. Cost of goods sold averages 70 percent of sales revenue. Ending inventory is one-half of the next month's predicted cost of sales. The other half of the merchandise is acquired during the month of sale. All purchases are paid for in the month after purchase. Operating costs are estimated at $28,000 each month and are paid during the month incurred. Required Prepare purchases and cash budgets for July, August, and September. Do not use a negative sign with your answers. MTC Wholesalers Purchases Budget For the Months of July, August, and September July August September $Answer $Answer $Answer Inventory required, current sales Answer Answer Answer Answer Answer Answer Answer Answer Answer $Answer $Answer $Answer Desired ending inventory Total inventory needs Less beginning inventory Purchases Do not use a negative sign with your answers. MTC Wholesalers Cash Budget For the Months of July, August, and September July August September $Answer $Answer $Answer Cash balance, beginning Cash receipts MTC Wholesalers Cash Budget For the Months of July, August, and September July August September Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer $Answer $Answer $Answer Current month's sales Previous month's sales Sales two months prior Total receipts Cash available Cash disbursements: Purchases Operating costs Total disbursements Cash balance, ending MTC Wholesalers Cash Budget For the Months of July, August, and September July QUESTION August September 4 Not complete Points out of 18.00 Flag question Question text Production and Purchases Budgets At the beginning of October, Comfy Cushions had 1,600 cushions and 10,500 pounds of raw materials on hand. Budgeted sales for the next three months are: Month October Novembe r Sales 8,000 cushions 10,000 cushions December 13,000 cushions Comfy Cushions wants to have sufficient raw materials on hand at the end of each month to meet 25 percent of the following month's production requirements and sufficient cushions on hand at the end of each month to meet 20 percent of the following month's budgeted sales. Five pounds of raw materials, at a standard cost of $0.90 per pound, are required to produce each cushion. Required a. Prepare a production budget for October and November. Do not use a negative sign with your answers. Comfy Cushions Production Budget For the Months of October and November October November December Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Unit Sales Desired ending inventory Finished goods requirements Less beginning inventory Production requirements b. Prepare a purchases budget in units and dollars for October. Do not use a negative sign with your answers. Comfy Cushions Purchases Budget For the Month of October October November Answer Answer Production requirements Desired ending inventory Answer Comfy Cushions Purchases Budget For the Month of October October November Answer Raw materials requirements Answer Less beginning inventory Answer Purchase requirements (units) $Answer Purchase requirements (in dollars) QUESTION 5 Not complete Points out of 15.00 Flag question Question text Cash Disbursement Timber Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Lumber purchases and payments are to be made during the month preceding the month of sale. Wages are estimated at 15 percent of sales and are paid during the month of sale. Other operating costs amounting to 10 percent of sales are to be paid in the month following the month of sale. Additionally, a monthly lease payment of $14,000 is paid for computer services. Sales revenue is forecast as follows Month February Sales Revenue $170,000 March 210,000 April 220,000 May 260,000 June 240,000 July 280,000 Required Prepare a schedule of cash disbursements for April, May, and June. Do not use a negative sign with your answers. Timber Company Schedule of Cash Disbursements April, May, and June April Lumbers purchases May June $Answer $Answer $Answer Timber Company Schedule of Cash Disbursements April, May, and June April May June Answer Answer Answer Answer Answer Answer Answer Answer Answer Wages Operating expenses Lease payment $Answer $Answer $Answer Total disbursements QUESTION 6 Not complete Points out of 10.00 Flag question Question text Purchases Budget in Units and Dollars Budgeted sales of Wirtz Music Shop for the first six months of 2017 are as follows: Unit Sales Month Month Unit Sales January 155,000 April 240,000 Februar y 185,000 May 205,000 March 225,000 June 265,000 Beginning inventory for 2017 is 35,000 units. The budgeted inventory at the end of a month is 40 percent of units to be sold the following month. Purchase price per unit is $5. Prepare a purchases budget in units and dollars for each month, January through May. WIRTZ MUSIC SHOP Purchases Budget January May, 2017 January February March April May Answer Answer Answer Answer Answer $Answer $Answer Purchase units: Purchase dollars: QUESTION 7 Not complete Points out of 15.00 $Answe $Answer $Answer r Flag question Question text Cash Budget Patrick's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows: Sales Revenue Month Month Sales Revenue January $ 350,000 March $ 250,000 Februar y 300,000 April 200,000 All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 80 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $52,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $35,000. Prepare monthly cash budgets for February, March, and April. Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers. Patrick's Retail Company Cash Budgets February, March, and April February March April $Answer $Answer $Answer Cash balance, beginning Total Cash receipts Answer Answer Answer Patrick's Retail Company Cash Budgets February, March, and April February March April Answer Answer Answer Answer Answer Answer Cash available Total disbursements $Answer $Answer $Answer Cash balance, ending QUESTION 8 Not complete Points out of 18.00 Flag question Question text Cash Budget The Williams Supply Company sells for $40 one product that it purchases for $25. Budgeted sales in total dollars for next year are $1,400,000. The sales information needed for preparing the July budget follows: Month Sales Revenue May $ 34,000 June 48,000 July 56,000 August 64,000 Account balances at July 1 include these: Cash $ 24,000 Merchandise inventory 17,500 Accounts receivable (sales) 25,760 Accounts payable (purchases) 16,250 The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sales in units for the next month. A 2 percent cash discount on sales is allowed if payment is made during the month of sale. Experience indicates that 50 percent of the billings will be collected during the month of sale, 40 percent in the following month, 8 percent in the second following month, and 2 percent will be uncollectible. Total budgeted selling and administrative expenses (excluding bad debts) for the fiscal year are estimated at $210,000 , of which one-half is fixed expense (inclusive of a $21,000 annual depreciation charge). Fixed expenses are incurred evenly during the year. The other selling and administrative expenses vary with sales. Expenses are paid during the month incurred. (Round your answers to the nearest whole number.) (a) Prepare a schedule of estimated cash collections for July. Williams Supply Company Schedule of Cash Collections For the Month of July $Answer Current month's sales $Answer Previous month's sales Two months' prior sales $Answer Williams Supply Company Schedule of Cash Collections For the Month of July $Answer Total cash collections (b) Prepare a schedule of estimated July cash payments for purchases. For this, perform your calculation using units rounding up to the nearest whole unit. Then convert to dollars for your answer. Williams Supply Company Schedule of Cash Payments for Purchases For the Month of July $Answer Current month's purchases Answer Beginning accounts payable $Answer Total cash payments (c) Prepare schedules of July selling and administrative expenses, separately identifying those requiring cash disbursements. Williams Supply Company Schedule of Selling and Administrative Expenses and Cash Disbursements For the Month of July Selling and administrative expenses: Total Cash $Answer Fixed Cash payment $Answer Williams Supply Company Schedule of Selling and Administrative Expenses and Cash Disbursements For the Month of July Total Cash Answer Answer $Answer $Answer Variable Total expenses and cash disbursements (d) Prepare a cash budget in summary form for July. Do not use negative signs with any answers below. Williams Supply Company Cash Budget For the Month of July $Answer Cash receipts Cash disbursements: $Answer Merchandise Answer Answer Selling and administrative $Answer Excess receipts (disbursements) QUESTION 9 Not complete Points out of 101.00 Flag question Question text Developing a Master Budget for a Merchandising Organization Dils Brother Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2017. Dils Brother Department Store Balance Sheet March 31, 2017 Assets Cash Liabilities and Stockholders' Equity $ 4,000 Accounts payable Accounts receivable 31,000 Dividends payable Inventory 36,000 Rent payable Prepaid Insurance 15,000 3,000 50,000 3,000 Stockholders' equity 25,000 Fixtures Total assets $31,000 $99,000 Total liabilities and equity $99,000 Actual and forecasted sales for selected months in 2017 are as follows: Month January Sales Revenue $ 70,000 Sales Revenue Month February 60,000 March 50,000 April 60,000 May 70,000 June 80,000 July 100,000 August 90,000 Monthly operating expenses are as follows: Wages and salaries Depreciation $ 27,000 100 Utilities 1,500 Rent 3,000 Cash dividends of $15,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's cost of sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $4,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed. (a) Prepare a purchases budget for each month of the second quarter ending June 30, 2017. Dils Brothers Department Store Monthly Purchase Budget Quarter Ending June 30, 2017 April May June Total $Answer $Answer $Answer $Answer Budgeted purchases (b) Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2017. Do not include borrowings. Dils Brothers Department Store Schedule of Monthly Cash Receipts Quarter Ending June 30, 2017 April May June Total $Answer $Answer $Answer $Answer Total cash receipts (c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2017. Do not include repayments of borrowings. Dils Brothers Department Store Schedule of Monthly Cash Disbursements Quarter Ending June 30, 2017 April May June Total $Answer $Answer $Answer $Answer Total cash disbursements (d) Prepare a cash budget for each month of the second quarter ending June 30, 2017. Include budgeted borrowings and repayments. Only use negative signs, if needed, for: excess receipts over disbursements, balance before borrowings and cash balances (beginning and ending). Dils Brothers Department Store Monthly Cash Budget Quarter Ending June 30, 2017 April May June Total $Answer $Answer $Answer $Answer Cash balance, beginning Answer Answer Answer Answer Answer Answer Answer Answer Receipts Disbursements Dils Brothers Department Store Monthly Cash Budget Quarter Ending June 30, 2017 April May June Total Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Excess receipts over disb. Balance before borrowings Answer Answer Borrowings Loan repayments $Answer $Answer $Answer $Answer Cash balance, ending (e) Prepare an income statement for each month of the second quarter ending June 30, 2017. Only use negative signs to show net losses for income. Dils Brothers Department Store Budgeted Monthly Income Statements Quarter Ending June 30, 2017 April May June Total $Answer $Answer $Answer $Answer Sales Cost of sales Answer Answer Answer Answer Dils Brothers Department Store Budgeted Monthly Income Statements Quarter Ending June 30, 2017 April May June Total Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Gross profit Operating expenses: Wages and salaries Depreciation Utilities Rent Insurance Interest Total expenses Net income $Answer $Answer $Answer $Answer Dils Brothers Department Store Budgeted Monthly Income Statements Quarter Ending June 30, 2017 April May June Total (f) Prepare a budgeted balance sheet as of June 30, 2017. Dils Brothers Department Store Budgeted Balance Sheet June 30, 2017 Assets Liabilities and Equity $Answe r Cash $Answer Merchandise payable Answer Accounts receivable Answer Dividend payable Answer Answer Inventory Rent payable Answer Answer Prepaid insurance Loans payable Answer Fixtures Answer Interest payable $Answe r Total assets Stockholders' equity Answer Total liab. & equity $Answer Dils Brothers Department Store Budgeted Balance Sheet June 30, 2017 Assets Liabilities and Equity