CRAVAT SALES COMPANY Budgets April May June Quarter 1a. Sales budget: Budgeted sales in units Seling price per unit Total sales 33,000 8.10 267,300 Correct! 3 16. Schedule of expected cash collections: 5 February sales March sales Apri sales May sales June sales Total cash collections 1 2 10. Merchandise purchases budget: 3 Budgeted sales in units Add budgeted ending inventory 5 Total needs Less beginning inventory Required unit purchases Unit cost Required dolar purchases 24.750 + 1d. Budgeted cash disbursements for inventory purchases: March purchases April purchases May purchases June purchases Total cash payments CRAVAT SALES COMPANY Cash Budget For the Three Months Ending June 30 April May June Quarter 39 40 41 42 43 44 15 Cash balance, beginning 46 Add receipts from customers 7 Total cash available 8 Less disbursements: 29 Purchase of inventory 50 Sales commissions 31 Salaries and wages 2 Utilities 53 Miscellaneous 54 Dividends paid 55 Land purchases 6 Total disbursements 7 Excess (deficiency) of receipts 8 over disbursements 9 Financing 0 Borrowings 1 Repayments 2 Interest 3 Total financing Cash balance, onding 3. CRAVAT SALES COMPANY Budgeted Income Statement For the Three Months Ended June 30 Sales in units Sales Variable expenses: Cost of goods sold Commissions Contribution margin Fixed expenses: Salaries and wages Utilities Insurance expired Depreciation Miscellaneous Net operating income Less interest expense Net Income W II 4. CRAVAT SALES COMPANY Budgeted Balance Sheet June 30 Assets Cash Accounts receivable Inventory Unexpired insurance Fixed assets, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable, purchases Dividends payable Loans payable, bank Capital stock, no par Retained eamings Total liabilities and equity Accounts receivable at June 30: May sales June sales Total Retained earnings at Juno 30: Balance, March 31 Add net incombe Total Less dividends declared Balance, June 30 CRAVAT SALES COMPANY Minimum ending cash balance Selling price (per unit) 12,000 8.10 $ Recent and forecast sales in units); January (actual) February (actual) March (actual) April May June July August September 20,000 24,000 28,000 33,000 41,000 65,000 40,000 36,000 32,000 75% Desired ending inventories (percentage of next month's sales) Cost of tiles (per unit) 4.85 Purchases paid as follows: In month of purchase In following month 50% 50% Collection on sales: Sales collected current month Sales collected following month Sales collected 2nd month following 30% 60% 10% Variable monthly expenses: Sales commissions per tle) 1.00 Fixed monthly expenses: Wages and salaries Utilities Insurance Depreciation Miscellaneous 22.000 14.000 1,200 1,500 3,000 Land purchased in May Dividends declared each quarter 30,000 12,000 14,000 Balance sheet at March 31: Assets Cash Accounts receivable February sales March sales Inventory (24,750 units) Prepaid insurance Fixed assets, net of depreciation Total assets $ 19,440 158,760 178.200 120,037.50 14,400 172,700 $ 499,337.50 Liabilities and Stockholders' Equity Accounts payable Dividends payable Capital stock Retained eamings Total liabilities and stockholders' equity 76,993.75 12,000 300,000 110,343.75 $ 499,337.50 Agreement with Bank: Borrowing increments Maximum borrowing amount Interest rate per month Repayment increments Total of interest paid each quarter Required minimum cash balance 1.000 $300,000 1% 1,000 100% 12,000