{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-09-12T08:11:11-04:00", "answer_date": "2024-09-12 08:11:11", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "10435562", "url": "\/study-help\/questions\/hillyard-company-an-office-supplies-specialty-store-prepares-its-master-10435562", "question_creation_date_js": "2024-09-12T08:11:11-04:00", "question_creation_date": "Sep 12, 2024 08:11 AM", "meta_title": "[Solved] Hillyard Company, an office supplies spec | SolutionInn", "meta_description": "Answer of - Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following d | SolutionInn", "meta_keywords": "hillyard,company,office,supplies,specialty,store,prepares,master,budget,quarterly,basis,data", "question_title_h1": "Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing", "question_title": "Hillyard Company, an office supplies specialty store, prepares its master budget on", "question_title_for_js_snippet": "Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis The following data have been assembled to assist in preparing 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 Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 48,000 224,000 60,000 370,000 $ 93,000 500,000 109,000 $ 702,000 $ 702,000 b Actual sales for December and budgeted sales for the next four months are as follows December (actual) January February March pril $ 280,000 $ 400,000 $ 600,000 $ 300,000 $ 200,000 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 (In other words, cost of goods sold is 60 of sales ) e Monthly expenses are budgeted as follows salaries and wages, $27,000 per month advertising, $70,000 per month shipping, 5 of sales other expenses, 3 of sales Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter f Each month's ending inventory should equal 25 of the following month's cost of goods sold g One half of a month's inventory purchases is paid for in the month of purchase the other half is paid in the following month h During February, the company will purchase a new copy machine for $1,700 cash During March, other equipment will be purchased for cash at a cost of $84,500 i During January, the company will declare and pay $45,000 in cash dividends j Management wants to maintain a minimum cash balance of $30,000 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 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 Using the data above, complete the following statements and schedules for the first quarter 1 Schedule of expected cash collections 2 a Merchandise purchases budget 2 b Schedule of expected cash disbursements for merchandise purchases 3 Cash budget 4 Prepare an absorption costing income statement for the quarter ending March 31 5 Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the schedule of expected cash collections Schedule of Expected Cash Collections January February March Quarter Cash sales $ 80,000 Credit sales 224,000 Total collections $ 304,000 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the merchandise purchases budget Merchandise Purchases Budget January February March Quarter Budgeted cost of goods sold $ 240,000 $ 360,000 Add desired ending inventory 90,000 Total needs 330,000 Less beginning inventory 60,000 $ 270,000 Required purchases $400,000 sales 60 cost ratio $240,000 $360,000 25 $90,000 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the schedule of expected cash disbursements for merchandise purchases Schedule of Expected Cash Disbursements for Merchandise Purchases January February March Quarter December purchases $ 93,000 January purchases 135,000 135,000 February purchases March purchases Total cash disbursements for purchases Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the cash budget (Cash deficiency, repayments and interest should be indicated by a minus sign ) Hillyard Company Cash Budget January February $ 48,000 March Quarter Beginning cash balance Add collections from customers 304,000 Total cash available Less cash disbursements 228,000 Inventory purchases Selling and administrative expenses Equipment purchases 129,000 Cash dividends 45,000 Total cash disbursements Excess (deficiency) of cash Financing Borrowings Repayments Interest Total financing Ending cash balance Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ending March 31 Hillyard Company Income Statement For the Quarter Ended March 31 Cost of goods sold Selling and administrative expenses Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Prepare a balance sheet as of March 31 Hillyard Company Balance Sheet March 31 Assets Current assets Total current assets Total assets Liabilities and Stockholders' Equity Current liabilities Stockholders' equity Total liabilities and stockholders' equity", "question_description": "

\"image\"image\"image\"image\"image\"image\"image<\/p> Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing 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: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 48,000 224,000 60,000 370,000 $ 93,000 500,000 109,000 $ 702,000 $ 702,000 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March pril $ 280,000 $ 400,000 $ 600,000 $ 300,000 $ 200,000 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. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month: advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500. i. During January, the company will declare and pay $45,000 in cash dividends. j. Management wants to maintain a minimum cash balance of $30,000. 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. 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: Using the data above, complete the following statements and schedules for the first quarter: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections January February March Quarter Cash sales $ 80,000 Credit sales 224,000 Total collections $ 304,000 Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the merchandise purchases budget. Merchandise Purchases Budget January February March Quarter Budgeted cost of goods sold $ 240,000 $ 360,000 Add desired ending inventory 90,000+ Total needs 330,000 Less beginning inventory 60,000 $ 270,000 Required purchases *$400,000 sales * 60% cost ratio = $240,000. +$360,000 ~ 25% = $90,000. Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the schedule of expected cash disbursements for merchandise purchases. Schedule of Expected Cash Disbursements for Merchandise Purchases January February March Quarter December purchases $ 93,000 January purchases 135,000 135,000 February purchases March purchases Total cash disbursements for purchases Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Hillyard Company Cash Budget January February $ 48,000 March Quarter Beginning cash balance Add collections from customers 304,000 Total cash available Less cash disbursements: 228,000 Inventory purchases Selling and administrative expenses Equipment purchases 129,000 Cash dividends 45,000 Total cash disbursements Excess (deficiency) of cash Financing: Borrowings Repayments Interest Total financing Ending cash balance Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Prepare an absorption costing income statement for the quarter ending March 31. Hillyard Company Income Statement For the Quarter Ended March 31 Cost of goods sold: Selling and administrative expenses: Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Prepare a balance sheet as of March 31. Hillyard Company Balance Sheet March 31 Assets Current assets: Total current assets Total assets Liabilities and Stockholders' Equity Current liabilities: Stockholders' equity: Total liabilities and stockholders' equity", "transcribed_text": "", "related_book": { "title": null, "isbn": null, "edition": null, "authors": null, "cover_image": null, "uri": null, "see_more_uri": "" }, "free_related_book": { "isbn": "", "uri": "", "name": "", "edition": "" }, "question_posted": "2024-09-12 08:11:11", "see_more_questions_link": "\/study-help\/questions\/business-finance-2024-September-20", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/positive-psychology\/1-before-pavlov-intentionally-conditioned-his-dogs-to-salivate-to-1998467", "description": "1. Before Pavlov intentionally conditioned his dogs to salivate to previously neutral stimuli (like the bell), they were classically conditioned by accident. 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