BUDGETING

Here's for more background of the Topic:

https://drive.google.com/drive/folders/10d_N9mxnbgrclBpETyNnxAu3a6jhxmJM?usp=sharing

• Make a MASTER BUDGET PREPARATION of Gilbert's Company for the year ending December 31, 2015 which is in the link that i provided.

PROBLEM 1

ELLIS SPORT SHOP projects the following sales, 75,000 for April, 95,000 for May, and 110,000 for June. Ninety percent of ELLI'S sales are credit with 60 percent of receivables collected in the month after the sales and the rest of receivables collected in the second month after the sales. February sales were 60,000 and March sales were 70,000. In the past ELLI'S bad debt percentage has been 0 and is expected to continue.

a.What is the monthly schedule of cash receipts for April to June.

b.What is the balance of receivables at the end of June?

PROBLEM 2

Frank's Sporting goods project sales for the second quarter of 2014, for April 100,000, for May 120,000 and for June 110,000. Ten percent of Frank's sales are for cash, seventy percent of accounts receivable are collected one month after the sale, and the rest are collected two months following the sale. January sales were 40,000. February sales were 60,000, and March sales were 80,000.

a.What is the monthly schedule of cash receipts for the second quarter of 2014

b.What is the balance in accounts receivable at the end of June?

PROBLEM 3

Rachel's Club Shop had sales of 3,000 units at 200 per unit last year. The marketing manager projects a 20 percent increase In unit volume this year with a 10 percent price increase. Returned merchandise will represent five percent of total sales. What is Rachel's Crib shop net sales projection this year?

PROBLEM 4

Sales for Western Boots Store are expected to 40,000 units for October. The company likes to maintain 15 percent of units sales for each month in ending inventory. Beginning inventory for October is 8,500 units. How many units should Western Boots produce for the coming month?

PROBLEM 5

Christian Company has budgeted sales of its popular boomerang for the next four months as follows:

Month Sales in Units

APRIL 50,000

MAY 75,000

JUNE 90,000

JULY 80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory level must be equal to 10% of the following month's sales. The inventory at the end of March was 5,000.

What is the production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.

PROBLEM 6

• What are the basic benefits and purposes of developing pro-forma statements and a cash budget?
• How are the collections and purchases schedules related to the borrowing needs of the corporation?