Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for AprilJuly are:
Garden Sales, Inc, solls garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur duting May. The following information has been assembled to assist in preparing a cash budget for the quarter Budgeted monthly absorption costing Income statements for April-July are: May June July 8 370.000 770.00 470,000 $370,000 199,00 339.000 329,000 259.000 1100D 231.000 141,000 111,000 Coat ot goods wola CES Selling and initive Sel axpen Administra gente Tots ating and distrative e 77.000 $7,000 58,00 37.000 58.400 35.200 35,000 120,000 155,400 94.20 22.000 1. 50.500 3.75,600 46.500539.000 "Includes $19.000 of depreciation each month b. Sales are 20% for cash and 80% on account c. Sales on account are collected over a three-month period with 10% collected in the month of sale: 80% collected in the first month following the month of sale, and the remaining 90% collected in the second month following the month of February's sales totaled $185.000 and March's sales totaled $235,000 onventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month Accounts payable at March 31 for inventory purchases during March total $105,700 Each month's ending inventory must qual 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 3tis 579,800 Dividends of $27,000 will be declared and paid in April 9 Lana costing $35,000 will be purchased for cash in May. The cash balance March 216 549.000, the company must maintain a cash balance of at least $40.000 at the end of each month The company has an agreement with a local bank that allows the company to borrow in increments of $1.000 at the beginning of each month, up to a total balance of $200,000. The interest rate on these loans is per month and for simplicity we will assume that interest is not compounded. The company would as far as it is able repay the nan plus accumulated interest at the end of the quarter WEN S 4. 3 % 5 6 7 8 9 Q 3 E R T Y > 4 S D F F G H . L Z B nep ality Proposaldea X Question 2 - HW8 - Connect X The Production Department 0.X ACG 2071 heducation.com/ext/map/index.html?_con=con&external_browser=0&launch Url=https%253A%252F%252Fims.mhed Saved CRM Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total, 2. Prepare the following for merchandise inventory a A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in to 3. Prepare a cash budget for April, May, and June as well as in total for the quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June. June Merchandise Purchases Budget April May Budgeted coat of goods sold Add: Desired ending merchandise inventory Total needs 0 Lese: Beginning merchandise Inventory Required inventory purchases $ 0 $ 0 0 05 0 D A NO B View History Bookmarks People Tab Window Help mality Proposal deux Question 2 - HW 8 - Connect The Production Department X ACO 2071 mheducation.com/extap/index.html?_con-con&external browser O&launchuri=https%253A%252F%252Flms.mhed.it Required: 1. Prepare a schedule of expected cash collections for April May, and June, and for the quarter in total, 2. Prepare the following for merchandise inventory a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total, 3. Prepare a cash budget for April, May, and June as well as in total for the quarter Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Prepare the following for merchandise inventory a schedule of expected cash disbursements for marchandise purchases for April, May, and June, and for the quarter in total. Schedule of Expected Cash Disbursements for Merchandise Purchases April May June Quarter $ 0 0 0 April putch May purchases June purchases Total cash disbursements o $ 0 $ 0$ 03 0 8 POD Saved Required 1 Required 2A Required 28 Required 3 Prepare a cash budget for April, May, and June as well as in total for the quarter. (Cash deficiency, repayments and interest sh be indicated by a minus sign.) May June Quarter 0 0 0 Garden Sates, Inc. Cash Budget For the Quarter Ended June 30 April Beginning cash balance Add collections from customers Total cash available 0 Less cash disbursements: Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements 0 Excess (deficiency of cash walitatie over disbursements 0 Financing Bonowings Repayment Interest Totaltnancing O Ending cash balance $ 0 $ 0 0 0 0 0 0 0 0 0 0$ 05 ca &
