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Garden Sales, Incorporated, sells garden supplies, Management is planning its cash needs for the second quarter. The company usually has to borrow money during this

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Garden Sales, Incorporated, 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: a. Budgeted monthly absorption costing income statements for April-July are: April $ 590,000 411.000 172,000 May $ 790,000 553,000 237,000 Jung $ 490,000 343.000 147.000 July $ 390,000 223,000 117,000 Salem Cost of goods sold Gross margin Selling and administrative expenses: Selling expense Administrative expense Total selling and administrative expenses Net operating income Includes $22,000 of depreciation each month 80,000 44,500 124,500 $ 52,500 99,000 60,000 159,000 $ 78,000 60,000 32.400 97400 $ 49,00 39,000 32.600 36.000 541,000 ht aces b. Sales are 20% for cash and 80% on account. 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 sales and the remaining 10% collected in the second month following the month of sale. Febroary's sales totaled $205,000, and March's sales totaled $245,000 d. Inventory 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 $109,900 e. Each month's ending Inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise Inventory at March 31 is $82,600 t. Dividends of $29,000 will be declared and paid in April g. Land costing $37,000 will be purchased for cash in May h. The cash balance at March 31 is $51,000, the company must maintain a cash balance of at least $40,000 at the end of each month. 1. 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 loan balance of $200,000. The interest rate on these loans 15.1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able repay the loan plus accumulated interest at the D 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 a schedule of expected cash collections for bril, May, and June, and for the quarter In total. Schedule of Expected Cash Collections April May June 4 Quarter 0 0 Cash sales Sales on account: February March April May June Totat cash collections O 0 0 0 $ 0$ 0 Required 2A > 1. The company nas 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 loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. 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 merchandise purchases budget for April, May, and une. ces Merchandise Purchases Budget April May June Total needs 0 0 0 Required inventory purchases 0 $ 0$ 0 company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning or each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. 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 Requirbd 28 Required 3 mices Prepare the following for merchandise Inventory, a schedule of expected cash disbursements for merchandise 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 April purchases May purchases June purchases Total cash disbursements 0 0 os os 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 interests be indicated by a minus sign.) Garden Sales, Incorporated Cash Budget For the Quarter Ended June 30 April May June Quarter Beginning cash balance Add collections from customers Total cash available 0 0 Less cash disbursements: Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements 0 0 0 0 Excess (deficiency) of cash available over disbursements 0 0 Financing Borrowings Repayment Interest Total financing 0 0 0 Ending cash balance 0 $ 0 $ 0 $ 0 es + 0 0 Prev 2 of 4 !!! Next >

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