Developing a Master Budget for a Merchandising Organization 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 Labilities and Stockholders' Equity 12sas Merchandise purchases payable 12.00 Accounts receive 2040 Dends payable 710 1400 Sohdery 8,00 Prenadinsurance Futures 000 Total Tocals and equity Actual and forecasted sales for selected months in the upcoming year are as follows Month in thousands) Sales Revenite January $2,600 FY 2.700 March 30000 Art 2000 My 3300 je 3.500 My 2,200 Apus 4,000 Monthly operating expenses are as follows: Womandanes 5750 Deprecation 125 Ad 55 Octs 250 Cash didends for the store of 1710 thousand are dedared 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 ecuattoo of sales Ending inventories are sufficient for 150w of the next month's cost of sales. Purthanes during any given month are paid in full during the following month Cath sales account for of the revenue or the credit sal 60 are collected in the next month and 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 des a minimum cash balance of $2 milion on the first of each month. At the time the principal is repald, interest is paid on the portion of principal that is paid All borrowing is at the beaning of the month and all repayment at the end of the month Marvey is never repaid at the end of the month it is borrowed Part A Part B Part Part D Part E Part F (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 $ X $ X $ X $ X (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 5 Ox $ Ox $ OX$ OX to) 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 5 Oxs 0X5 OXS OX Part Part Part (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 Cashbace, beginning 5 OX1 OXS OX Recets OX OM OM OX Disbursement OX ON OM OX LOSS Feestverdis OX 0* OX OX Balance before borrowing OX OK OX O Borowie OX O O OW Lancaments 0 OM Cashbalance, ending OM ON OX Part A Part B Part Part D Part E Part F (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 3,600 $ 3,800 $ 3,500 $ 10,900 Cost of sales 2,160 2.280 2,100 6,540 Gross profit 1,440 1.520 1,400 4,360 Operating expenses: Wages and salaries 750 750 750 2,250 Depreciation 75 75 75 225 Advertising 55 55 55 165 Other costs 350 350 350 1,050 Insurance 150 X 150 X 150 X 450 X Interest 0 x OX 0 X OX OX OX Total expenses OX Pre-tax income $ Ox $ 0 X $ 0.X 0 x Part A Part B Part Part D Part E Part F (f) Prepare a budgeted balance sheet as of June 30. NORDSTROMS Budgeted Balance Sheet (in thousands) June 30 Assets Liabilities and Equity Cash 0 x Merchandise payable $ Accounts receivable 0 X Dividend payable Inventory Prepaid insurance 0X Fixtures Total assets 0x Stockholders' equity Total liab. & equity $ 0 X OX Check Developing a Master Budget for a Merchandising Organization 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 Labilities and Stockholders' Equity 12sas Merchandise purchases payable 12.00 Accounts receive 2040 Dends payable 710 1400 Sohdery 8,00 Prenadinsurance Futures 000 Total Tocals and equity Actual and forecasted sales for selected months in the upcoming year are as follows Month in thousands) Sales Revenite January $2,600 FY 2.700 March 30000 Art 2000 My 3300 je 3.500 My 2,200 Apus 4,000 Monthly operating expenses are as follows: Womandanes 5750 Deprecation 125 Ad 55 Octs 250 Cash didends for the store of 1710 thousand are dedared 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 ecuattoo of sales Ending inventories are sufficient for 150w of the next month's cost of sales. Purthanes during any given month are paid in full during the following month Cath sales account for of the revenue or the credit sal 60 are collected in the next month and 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 des a minimum cash balance of $2 milion on the first of each month. At the time the principal is repald, interest is paid on the portion of principal that is paid All borrowing is at the beaning of the month and all repayment at the end of the month Marvey is never repaid at the end of the month it is borrowed Part A Part B Part Part D Part E Part F (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 $ X $ X $ X $ X (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 5 Ox $ Ox $ OX$ OX to) 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 5 Oxs 0X5 OXS OX Part Part Part (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 Cashbace, beginning 5 OX1 OXS OX Recets OX OM OM OX Disbursement OX ON OM OX LOSS Feestverdis OX 0* OX OX Balance before borrowing OX OK OX O Borowie OX O O OW Lancaments 0 OM Cashbalance, ending OM ON OX Part A Part B Part Part D Part E Part F (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 3,600 $ 3,800 $ 3,500 $ 10,900 Cost of sales 2,160 2.280 2,100 6,540 Gross profit 1,440 1.520 1,400 4,360 Operating expenses: Wages and salaries 750 750 750 2,250 Depreciation 75 75 75 225 Advertising 55 55 55 165 Other costs 350 350 350 1,050 Insurance 150 X 150 X 150 X 450 X Interest 0 x OX 0 X OX OX OX Total expenses OX Pre-tax income $ Ox $ 0 X $ 0.X 0 x Part A Part B Part Part D Part E Part F (f) Prepare a budgeted balance sheet as of June 30. NORDSTROMS Budgeted Balance Sheet (in thousands) June 30 Assets Liabilities and Equity Cash 0 x Merchandise payable $ Accounts receivable 0 X Dividend payable Inventory Prepaid insurance 0X Fixtures Total assets 0x Stockholders' equity Total liab. & equity $ 0 X OX Check