HAPPY HOLIDAYS organization gives you the following information to develop the following budgets.

Collections for sales for the quarter (10 points)

Purchases for the quarter (10 points)

Outlays on purchases for the quarter (10 points)

Disbursements of administrative and sales expenses for the quarter (10 points)

Cash budget (25 points)

Financial and operational data of Corporacin FELICES FIESTAS

The FELICES FIESTAS Corporation is dedicated to the retail business and is designing its master budget for the next quarter of operations from April to June 20xx. The data collected and necessary to work with such a budget are as follows:

A. Certain data on the Status of the Situation (Balance Sheet) as of March 31, 20xx:

Effective $20,000 Dr.

Accounts receivable $64,000 Dr.

Inventory $15,400 Dr.

Buildings and equipment (depreciation net)

$225,000 Dr.

Accounts payable $23,400 Cr.

Long-term debts $90,000 Cr.

Common shares-capital $150,000 Cr.

Retained earnings $61,000 Cr.

Totals

$324,400. $324,400

B. The expected (projected) and actual sales for several months of 20xx are:

March (real) $80,000

April $55,000

May $68,000

June $95,000

July $73,000

C. Other important information:

1- Monthly sales are 20% in cash and 80% on credit. The credit sales of the previous month are charged in full in the following month (that's why what is in receivable at the end of March is 80% of March's sales).

2- The gross profit margin generated by the corporation in its sales is 30%.

3- The final inventory of each month is equal to 25% of the budgeted sales cost for next month.

4- 40% of monthly purchases of merchandise are paid in the month of purchase and the rest in the month following the purchase.

5- The expected monthly expenses are: salaries, $12,000; advertising, $7,000 per month and remaining expenses (except depreciation) represent 9% of sales, commissions represent 5% of the month's sales. It assumes that these expenses are paid every month (nothing is owed at the end of the month).

6- Cash equipment was purchased: $12,000 in April and $8,000 in May 20xx.

7- Management wants to maintain a minimum cash balance at the end of each month of $12,000.

8- The company paid dividends $4,500 in June.

9- When the company needs money, it can borrow from a local bank in increments of $1,000 at the beginning of each month up to a loan cap of $20,000. The interest rate that the bank charges on these loans is 1% monthly and the interest is paid next month (we assume that it is not compound interest and that each loan is made at the end of the month).

Instructions:

Use the data and information of the HAPPY HOLIDAY Corporation, and the results you obtained in the previous budgets and prepare the cash budget for the quarter ended in June. Use the following table as a model:

April

Aayo

June

Total

Initial cash balance

Cash collections.

Available cash

Fewer disbursements:

Shopping

Administrative and administrative expenses

Sales

Purchase of equipment

Dividends

Total disbursements.

Excess (deficiency) of cash

Financing:)

Lending

Loan payments.

Interests

Financing:

Final effective balance