Hello Chegg,

This is a question within our homework assignment and I was hoping to get some answers as I am lost.

Thanks,

A not so great accounting student

Question 4

Question 5

Milo Company manufactures beach umbrellas. The company is now preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a. The Marketing Department has estimated sales as follows for the remainder of the year (in units): August September 50,000 October 90,000 November 70,000 December 40,000 30,000 30,000 The selling price of the beach umbrellas is 512 per unit. Sales in June were 45,000 units. b. All sales are on account. On the basis of past experience, sales are collected in the following pattern: 30% in the month of sale 55% in the month following sale 5% uncollectible C. The company maintains finished goods inventories equal to 15% ofthe following month's sales. This requirement will be met at the end of June. d. Each beach umbrella requires 4 metres of Gilden, a material that is sometimes hard to get. Therefore the company requires that the inventory of Gilden on hand at the end of each month be equal to 50% of the following month's production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be as follows: June 30 September 30 112.000 metres ? metres e. Gilden costs 50.80 per metre. One-half of a month's purchases of Gilden are paid for in the month of purchase: the remainder are paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $96,000 Required 1. Prepare a sales budget, by month and in total, for the third quarter. Also, prepare a schedule of expected cash collections, by month and in total, for the third quarter MILO COMPANY Sales Budget August September Quarter Budgeted sales MILO COMPANY Schedule of Expected Cash Collections August SeptemberQuarter Accounts receivable, June 30 July sales August sales September sales Total cash collections 2. Prepare a production budget for each of the months July to October. MILO COMPANY Production Budget for July-October July August SeptemberOctober Total needs 3. Prepare a materials purchases budget for Gilden, by month and in total, for the third quarter. Also, prepare a schedule of expected cash payments for Gilden, by month and in total, for the third quarter. MILO COMPANY Materials Budget Month July August September Quarter Total needs (metres) MILO COMPANY Schedule of Expected Cash Payments July August September Quarter Accounts payable, June 30 July purchases August purchases September purchases Total cash payments Hillyard Company, an office supplies specialty store, prepares its master budget on a quarteriy basis. The following data have been assembled to assist in preparation of the master budget for the first quarter a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Debits 5 48,000 216,000 57.000 371,000 Credits Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Capital shares Retained earnings 5 94,000 480,000 118,000 5692,000 5692,000 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March April 5270,000 380,000 580,000 280,000 180,000 c, sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. e. Monthly expenses are budgeted as follows: salaries and wages, $28,000 per month; advertising S64.000 per month, shipping, 5% of sales; depreciation. S 15.000 per month; other expenses, 3% of f. At the end of each month, inventory is to be on hand equal to 25% of the following month's sales needs g. One-half of a month's inventory purchases are paid for in the month of purchase; the other half are paid h. During February, the company will purchase a new copy machine for $1,000 cash. During March, other i. During January, the company will declare and pay $43,000 in cash dividends stated at cost. for in the following month equipment will be purchased for cash at a cost of $80,000 j. The company must maintain a minimum cash balance of 531,000. An open line of credit is available at a ocal bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid only at the time of payment of principal. The annual interest rate is 12%. (Figure interest on whole months, e.g., 1/12, 2/12.) Requirec Using the preceding data, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections. HILLYARD COMPANY Schedule of Expected Cash Collections January February March Quarter Cash sales Credit sales Total cash collections 2-a. Inventory purchases budget. HILLYARD COMPANY Inventory Purchases Budget January February March Quarter Total needs 2-b. Schedule of cash disbursements for purchases. HILLYARD COMPANY Schedule of Cash Disbursements for Purchases January February March Quarter December purchases January purchases February purchases March purchases Total cash disbursements for purchases 3. Schedule of cash disbursements for expenses HILLYARD COMPANY Schedule of Cash Disbursements for Operating Expenses JanuaryFebruary Mrch Quarter Total cash disbursements for operating expenses 4. Cash budget. (Roundup "Borrowing and "Repayments" answers to the nearest whole dollar amount. Any "Repayments" and "Interest" should be indicated by a minus sign.) HILLYARD COMPANY Cash Budget January February Quarter Total cash available Deduct: Disbursements Total disbursements Excess (deficiency) of cash Financing Total financing 5. Prepare an income statement for the quarter ending March 31 HILLYARD COMPANY Income Statement For the Quarter Ended March 31 Deduct: Cost of goods sold: Goods available for sale Deduct: Operating expenses 6. Prepare a balance sheet as of March 31 HILLYARD COMPANY Balance Sheet As of March 31 Assets Current assets Total current assets Total assets Liabilities and Shareholders' Equity Current liabilities: Stockholders' equity Total shareholders equity Total liabilities and shareholders' equity