Assume Nordstrom prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for one of its stores (in thousands).

NORDSTROM Balance Sheet March 31
Assets		Liabilities and Stockholders' Equity
Cash	$ 2,525	Merchandise purchases payable	$2,400
Accounts receivable	2,040	Dividends payable	710
Inventory	3,400	Stockholders' equity	8,005
Prepaid Insurance	150
Fixtures	3,000
Total assets	$11,115	Total liabilities and equity	$11,115

Actual and forecasted sales for selected months in the upcoming year are as follows:

Month (in thousands)	Sales Revenue
January	$2,600
February	2,700
March	3,000
April	3,600
May	3,800
June	3,500
July	3,200
August	4,000

Monthly operating expenses are as follows:

Wages and salaries	$750
Depreciation	75
Advertising	55
Other costs	350

Cash dividends for the store of $710 thousand 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. The prepaid insurance is for five more months. Cost of goods sold is equal to 60% of sales. Ending inventories are sufficient for 150% of the next months cost of sales. Purchases during any given month are paid in full during the following month. Cash sales account for 50% of the revenue. Of the credit sales, 60% are collected in the next month and 40% are collected in the month after. Money can be borrowed and repaid in multiples of $100 thousand at an interest rate of 12% per year. The company desires a minimum cash balance of $2 million 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.

NORDSTROMS Monthly Purchase Budget (in thousands) Quarter Ending June 30
	April	May	June	Total
Budgeted purchases	Answer	Answer	Answer	Answer

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

NORDSTROMS Schedule of Monthly Cash Receipts (in thousands) Quarter Ending June 30
	April	May	June	Total
Total cash receipts	Answer	Answer	Answer	Answer

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

NORDSTROMS Schedule of Monthly Cash Disbursements (in thousands) Quarter Ending June 30
	April	May	June	Total
Total cash disbursements	Answer	Answer	Answer	Answer

(d) Prepare a cash budget for each month of the second quarter ending June 30. 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).

NORDSTROMS Monthly Cash Budget (in thousands) Quarter Ending June 30
	April	May	June	Total
Cash balance, beginning	Answer	Answer	Answer	Answer
Receipts	Answer	Answer	Answer	Answer
Disbursements	Answer	Answer	Answer	Answer
Excess receipts over disb.	Answer	Answer	Answer	Answer
Balance before borrowings	Answer	Answer	Answer	Answer
Borrowings	Answer	Answer	Answer	Answer
Loan repayments	Answer	Answer	Answer	Answer
Cash balance, ending	Answer	Answer	Answer	Answer

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

Only use negative signs to show net losses for income.

NORDSTROMS Budgeted Monthly Income Statements (in thousands) Quarter Ending June 30
	April	May	June	Total
Sales	Answer	Answer	Answer	Answer
Cost of sales	Answer	Answer	Answer	Answer
Gross profit	Answer	Answer	Answer	Answer
Operating expenses:
Wages and salaries	Answer	Answer	Answer	Answer
Depreciation	Answer	Answer	Answer	Answer
Advertising	Answer	Answer	Answer	Answer
Other costs	Answer	Answer	Answer	Answer
Insurance	Answer	Answer	Answer	Answer
Interest	Answer	Answer	Answer	Answer
Total expenses	Answer	Answer	Answer	Answer
Pre-tax income	Answer	Answer	Answer	Answer

(f) Prepare a budgeted balance sheet as of June 30.

NORDSTROMS Budgeted Balance Sheet (in thousands) June 30
Assets		Liabilities and Equity
Cash	Answer	Merchandise payable	Answer
Accounts receivable	Answer	Dividend payable	Answer
Inventory	Answer
Prepaid insurance	Answer
Fixtures	Answer
Total assets	Answer	Stockholders' equity	Answer
		Total liab. & equity	Answer