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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

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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 $ 49,000 207,200 59,100 359,000 $ 87,825 500,000 86,475 $ 674,300 5.674,300 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March April $ 259,000 $ 394,000 $ 591,000 $ 305,000 5 202,200 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, $24,000 per month advertising, 564,000 per month shipping.5% of sales, other expenses, 3% of sales Depreciation, including depreciation on new assets acquired during the quarter will be $43,540 for the quarter Each month's ending inventory should equal 25% of the following month's cost of goods sold 9. One-half of a month's inventory purchases i 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 $1,900 cash. During March, other equipment will be purchased for cash or a cost of $74,500 L. During January, the company will declare and pay $45,000 in cash dividends. J. Management wants to maintain a minimum cash balance of 530,000 The company has an agreement with a local bank thet ollow the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loons is per month and for simplicity we will assume that interest is not compounded The company would, as far as it is oble, repay the foon plus occumulated 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 25 Required 3 Required 4 Required 5 Quarter Complete the Schedule of expected cash collections: Schedule of Expected Cash Collections January February March Cash sales s 78,800 Credit sales 207 200 Total collections $ 286.000 Required 2A > Required 1 Required 2A Required 28 Required 3 Required 4 Required 5 Complete the merchandise purchases budget: March Quarter Merchandise Purchases Budget January February Budgeted cost of goods sold $236.400 $ 354 600 Add desired ending inventory 88.6501 Total needs 325 050 Less beginning inventory 59,100 Required purchases *$394 000 sales 0096 cost ratio $236.400 15354 600 - 25% = 588 650 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 20hs Required 3 Required 4 Required 5 Complete the schedule of expected cash disbursements for merchandise purchases. Quarter Schedule of Expected Cash Disbursements for Merchandise Purchases January February March December purchases $ 87,825 January purchases 132 975 132 975 February purchases March purchases Total cash disbursements for purchases Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Hillyard Company Cash Budget January February March Quarter Beginning cash balance 5 49,000 Add collections from customers 285,000 Total cash available Less cash disbursements Inventory purchases 220, 800 Selling and administrative expenses 119.520 Equipment purchases Cash dividends 45,000 Total cash disbursements 385 320 Excess (deficiency) of cash Financing Borrowings Repayments Interest Total financing Ending cash balance 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

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