Following information relates to Acco Co Beginning cash balance on July 1 $30,000 Cash receipts from sales 30 is collected in the month of sale, 50 in the next month, and 20 in the second month after sale (uncollectible accounts are negligible and can be ignored) Sales amounts are May (actual), $1,032,000 June (actual), $720,000 and July (budgeted), $840,000 Payments on merchandise purchases 60 in the month of purchase and 40 in the month following purchase Purchases amounts are June (actual), $258,000 and July (budgeted), $600,000 Budgeted cash payments for salaries in July $126,600 Budgeted depreciation expense for July $7,200 Other cash expenses budgeted for July $90,000 Accrued income taxes due in July $80,000 Bank loan interest paid in July $3,960 Additional Information Cost of goods sold is 44 of sales Inventory at the end of June is $48,000 and at the end of July is $278,400 Salaries payable on June 30 are $30,000 and are expected to be $24,000 on July 31 The equipment account balance is $960,000 on July 31 On June 30, the accumulated depreciation on equipment is $168,000 The $3,960 cash payment of interest represents the 1 monthly expense on a bank loan of $396,000 Income taxes payable on July 31 are $99,456, and the income tax rate is 40 The only other balance sheet accounts are Common Stock, with a balance of $328,000 on June 30 and Retained Earnings, with a balance of $643,200 on June 30 Prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31 Calculation of Cash Receipts From Sales Collected in Total Sales May June July 31 Accounts Rec July Credit sales from May $ June 1,032,000 720,000 840,000 2,592,000 $ July Totals $ 0 $ 0 $ 0 0 Calculation of Cash Payments for Merchandise Paid in July 31 Accounts Pay Total Purchases June July Purchases from June $ July 258,000 600,000 858,000 $ Totals $ 0 $ 0 $ 0 ACCO CO Budgeted Income Statement For Month Ended July 31 Operating expenses Total operating expenses 0 0 $ 0 ACCO CO Budgeted Balance Sheet As of July 31 Assets 0 Liabilities and Equity Liabilities Liabilities Stockholders' Equity

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 22, 2024

Following information relates to Acco Co. Beginning cash balance on July 1: $30,000. Cash receipts from sales: 30% is collected in the month of sale,

Following information relates to Acco Co.

Beginning cash balance on July 1: $30,000.
Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,032,000; June (actual), $720,000; and July (budgeted), $840,000.
Payments on merchandise purchases: 60% in the month of purchase and 40% in the month following purchase. Purchases amounts are: June (actual), $258,000; and July (budgeted), $600,000.
Budgeted cash payments for salaries in July: $126,600.
Budgeted depreciation expense for July: $7,200.
Other cash expenses budgeted for July: $90,000.
Accrued income taxes due in July: $80,000.
Bank loan interest paid in July: $3,960.

Additional Information:

Cost of goods sold is 44% of sales.
Inventory at the end of June is $48,000 and at the end of July is $278,400.
Salaries payable on June 30 are $30,000 and are expected to be $24,000 on July 31.
The equipment account balance is $960,000 on July 31. On June 30, the accumulated depreciation on equipment is $168,000.
The $3,960 cash payment of interest represents the 1% monthly expense on a bank loan of $396,000.
Income taxes payable on July 31 are $99,456, and the income tax rate is 40%.
The only other balance sheet accounts are: Common Stock, with a balance of $328,000 on June 30; and Retained Earnings, with a balance of $643,200 on June 30.

Prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31.

image text in transcribed

Calculation of Cash Receipts From Sales ........ --Collected in- Total Sales May June July 31 Accounts Rec. July Credit sales from: May $ June 1,032,000 720,000 840,000 2,592,000 $ July Totals $ 0 $ 0 $ 0 0 Calculation of Cash Payments for Merchandise --Paid in-- July 31 Accounts Pay. Total Purchases June July Purchases from: June $ July 258,000 600,000 858,000 $ Totals $ 0 $ 0 $ 0 ACCO CO. Budgeted Income Statement For Month Ended July 31 Operating expenses: Total operating expenses 0 0 $ 0 ACCO CO. Budgeted Balance Sheet As of July 31 Assets 0 Liabilities and Equity Liabilities Liabilities Stockholders' Equity