Attachment PROJECT DES2012 Williams Company sells women's hats for $12 cach. Actualand budget January (actual) ......... 25.000 Sune (ougat)........ February (actual) ...... 26.000 July (budget) ... March (actual) 40.000 August ( ... April (badget). May (budeet) .............. 100.000 and budgeted sales in units for nine months are as follows: * ............. 50,000 30,000 pet) ....... 28.000 65,000 September but).... 29. tory on hand The company should have sufficient inventory on hand at the end of ea following month Suppliers are paid $4.50 cash for a hat. One half ofa 's nurchases are other half is paid for in the following month. All sales are credit with no dis company has found, however, that only 20% of a month's sles are collected in collected in the following month, and the remaining 10% is collected in the se Monthly operating expenses for the company are given below: Experten dafach month to supply 40% of the hats sold in the month's purchases are paid for in the month of purchase; the afe on credit, with no discount, and payable within 15 days. The 's sales are collected in the month of sale. An additional 70% is ng 10% is collected in the second month following sale. me company Expenses are paid in the month incurred h of sale. Ana 4% of sales Variable: Sales commission...... Fixed: Advertising Rent... Salaries Utilities....... Insurance Depreciation... ........ $190.000 22.000 106,000 5.000 15,000 Additional information: a. In April the company will pay $53.750 for restructuring costs. b. Insurance is paid on an annual basis, in November of each year. c. The company plans to purchase investments for $161.250 cash in May. d. The company will purchase for cash $40,000 is new equipment during June. e. The company declares dividends of $15,000 each quarter, payable in the first month of the following quarter. f. The company plan to collect $50,000 from common stock issued in May. A listing of the company's ledger accounts as of March 31, is given below: Assets Cash................ ..... $74,000 Accounts Receivable (531,200 February Sales $384.000 March sales)... Inventory ..... ..... .. . Prepaid Insurance ....... . Property and equipment (net) .............. Total assets..... Liabilities and Stockholders' Equity Accounts payable....... Dividends payable........ 567,500 415,200 104,000 15,800 886.000 $1.495.000 $112.500 15.000 800.000 w ty......... .. $1.495.000 Common Stock Retained earnings..... .. Total liabilities and stockholders' equility. The company maintains a minimum cash balance of $50,000. All repayments are made at the end of a month. The company has an agreement with a bank that allows the company beginning of each month. The interest rate on these loans is 15% per interest is not compounded. At the end of the quarter, the company e loan and as much of the loan as possible in increments of $1.00 $50,000. All borrowing is done at the beginning of a month; any llows the company to borrow in increments of $1,000 at the we loans is month and for simplicity we will assume that ter, the Company would pay the bank all of the accumulated interest on increments of $1,000), while still retaining at least $50,000 in cash. and for the accu Required: Prepare budgets for the three month criod endine June 30 Include the fo 1. a. A sales budget, by month and for the quartet e-month period end the flowing detailed budgets b. A schedule of expected cash collections from sales by month and for the quante c. A merchandise purchases badest in wis and show the hudest by month and for the quantic c d. A schedule of expected cash disbursements fo uses by month and for the quarter 2. A cash budget. Show the budget by month and for the gater. Determine any borrowings that would be needed to maintain the minimum cash balance of $50,000
