Almogood Unlimited, a nationwide distributor of low-cost imitation designer jeans, has an exclusive franchise on the distribution of the jeans, and sales have grown quickly. To date, the companys budgeting practices have been inferior, and, at times, the company has experienced a cash shortage. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1.

Sales Budget:-

Particulars	April	May	June	Total
Sales in Units	66,000.00	82,000.00	70,000.00	218,000.00
Sales Price per unit	15.00	15.00	15.00
Sales Revenue	990,000.00	1,230,000.00	1,050,000.00	3,270,000.00

Schedule of Expected Cash Collections:-

Particulars	April	May	June	Total
Sales Revenue	990,000.00	1,230,000.00	1,050,000.00	3,270,000.00
Cash Collections:-
February	46,000.00	-	-	46,000.00
March	326,769.23	145,230.77	-	472,000.00
April	346,500.00	445,500.00	198,000.00	990,000.00
May	-	430,500.00	553,500.00	984,000.00
June	-	-	367,500.00	367,500.00
Total Cash Collections	719,269.23	1,021,230.77	1,119,000.00	2,859,500.00

Merchandise Purchase budget in Units and Dollars:-

Particulars	April	May	June	Total
Budgeted Sales	66,000.00	82,000.00	70,000.00	218,000.00
Desired Ending Inventory	32,800.00	28,000.00	30,000.00	90,800.00
Gross Inventory	98,800.00	110,000.00	100,000.00	308,800.00
Opening Inventory	26,400.00	32,800.00	28,000.00	87,200.00
Net Inventory Required	72,400.00	77,200.00	72,000.00	221,600.00
Cost of one pair	8.00	8.00	8.00
Purchase Cost	579,200.00	617,600.00	576,000.00	1,772,800.00

Schedule of Expected Cash Disbursements:-

Particulars	April	May	June	Total
Inventory Purchase - Units	72,400.00	77,200.00	72,000.00	221,600.00
Cost of one pair	8.00	8.00	8.00
Purchase Cost	579,200.00	617,600.00	576,000.00	1,772,800.00
Cash Disbursements:-
March	138,800.00	-	-	138,800.00
April	405,440.00	173,760.00	-	579,200.00
May	-	432,320.00	185,280.00	617,600.00
June	-	-	403,200.00	403,200.00
Total Cash Disbursements	544,240.00	606,080.00	588,480.00	1,738,800.00

QUESTIONS TO ANSWER

e) A cash budget. Show the budget by month and in total.

f) A budgeted income statement for the three-month period ending June 30. Use the variable costing approach.

g) A budgeted balance sheet as at June 30.

39 xv fx M K G 1 H D A Almogood Unlimited, a nationwide distributor of low-cost imitation designer jeans, has an exclusive franchise on the distribution of the jeans, and sales have grown quickly. To date, the company's budgeting practices have been inferior, and, at times, the company has experienced a cash shortage. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. The jeans are sold to retailers for the amount in Cell B16 each. Recent and forecasted sales in units are as follows: January (actual) 32,000 February (actual) 45,000 March (actual) 59,000 0 April 66,000 11 May 82,000 12 June 70,000 13 July 75,000 14 August 73,000 15 September 68,000 16 Selling price per unit $ 15.00 17 18 All sales are on credit, with no discount, and payable within 30 days. Bad debts have been negligible. 19 Collection of credit sales are planned as follows: 20 In the month of sale 35% 21 In the month following the sale 45% 22 In the second month following the sale 20% 23 24 Ending inventories should be equal to 40% of the next month's sales in units 25 26 Cost of one pair of jeans $ 8.00 27 Purchases are paid for as follows: 28 In month of purchase 70% 29 in month following purchase 30% 30 31 The company's monthly selling and administrative expenses are given below: 32 33 Variable: 34 Sales commissions 3% of sales 35 Fbed: 36 Advertising $ 280,000 37 Rent $ 28,000 38 Wages and salaries $ 140,000 39 Utilities S 15,000 40 Insurance s 5,000 41 Depreciation $ 34,000 42 43 All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance. Insurance is paid on an annual basis, in November of each year. 44 The company plans to pay cash for the following planned equpment purchases: 45 In April S 46 in May $ 14.000 47 In June S 50,000 48 49 The company declares dividends each quarter, payable in the first month of the following quarter. SO Quarterly dividend amount $ 19,000 51 52 The company's balance sheet at March 31 is given below: (these are actual numbers, not budgeted) 53 54 Assets SS $ 94.000 56 Accounts receivable $ 518.000 AVR consists of: S7 Inventory S 136,000 February sales to be collected $ 46,000 58 Prepaid insurance S 49,000 March sales to be collected $ 472.000 59 S Foxed assets, net of depreciation S 1,050.000 518,000 60 Totalassets S 1,847,000 Cash 61 62 63 IS IS 64 Liabilities and Shareholders Equity Accounts payable Dividends payable Common shares Retained earnings Total laboties and shareholders equity 138 BOU 19.000 1000XXO 589 200 IS 65 606 Bmg 1 847 000 67 68 69 All borrowing is done at the beginning of the month withary repayments made at the end of the month. The interest must be paid at the end of each month based on the outstanding loan balance for that month, The company requires a minimum monthly cash balance of: 50.000 9 10 71 Annual Interstrate 72 73 Required: Create an Excel template using the appropriate labeled "tab" which wmsove the questions below usine cel references, such that when data on the "Question" Tabs changed the solution template will automatically 74 update the solution using the new data 75 Your template tabs should include months for the second quarter of the year (Apr-June): 76 a) A sales budget by month and in total! 77 b) A schedule of expected cash collections from sales by month and in total, 78 C) A merchandise purchases budget in units and in dollars. Show the budget by month and in total 79 d) A schedule of expected cash disbursements for merchandse purchases, by month and in total 80 e) A cash budget. Show the budget by month and in totall 81 f) A budgeted income statement for the three-month period ending June 30. Use the variable posting approach 82 B) A budgeted balance sheet as at June 30. 83 Cover Page Question a) Sales Budget b) Cash Collections c) purchases budget d) cash disbursements e) Cash Budget Select destination and press ENTER or choose Paste