HOP Save a The following information relates to a company Budgeted monthly absorption costing income statements for JulySeptember are: July Sales August September Cost of goods sold $ 510,000 $ 710,000 $ 410,000 357,000 497,000 Gross margin 287.000 153,000 Selling and administrative expenses 213,000 123,000 Selling expense 21,000 91,000 Administrative expense" 52,000 40.500 53,600 Total selling and administrative expenses 22,600 111,500 144,600 84,600 Net operating Income 5 41,500 5 63,400 $ 30,400 "Includes $13,000 of depreciation each month (Hint: Remember that depreciation is a non-cash expense so it doesn't belong on your cash budget) Additional information 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 sale and the remaining 10% collected in the second month following the month of sale. May's sales totaled $145,000, and June's sales totaled $205,000 Help Save & Exit S . The company pays for 50% of inventory purchases in the month of purchase and the remaining 50% the following month Accounts payable at June 30 for inventory purchases during June total $93100, Budgeted inventory purchases for the quarter are: July $385,000 August $455,000 September: $273.000 In July the company will declare and pay dividends of $21000 In August the company will pay cash for land casting $29,000. On June 30, the cash balance is $43,000, the company must maintain a cash balance of at least $40,000 at the end of each month The company has an agreement with a local bank that allows the company to borrow in increments of S1000 at the beginning of each month. The interest rate on these loans is 1% per month simple interest. Any money borrowed will be paid back with Interest on the last day of the quarter . Required: 1. Piepare a schedule of expected cash collections for July August September, and the quarter in total 2. Prepare a schedule of expected cash disbursements for inventory purchases for July August, September and the quarter in total 3. Prepare a cash budget for July August September, and the quarter in total Complete this question by entering your answers in the tabs below. Required 1 Required 2B Required 3 Prepare a schedule of expected cash collections for July, August, September, and the quarter in total. Schedule of Expected Cash Collections July August September Quarter $ 0 0 Cash sales Sales on account May June July August September Total cash collections 0 0 0 0 $ 0 $ 0 $ 0 Required 2B > Complete this question by entering your answers in the tabs below. Required 1 Required 28 Required 3 Prepare a schedule of expected cash disbursements for inventory purchases for July, August, September and the quarter in total. Schedule of Expected Cash Disbursements for Inventory Purchases July August September Quarter $ 0 0 July purchases August purchases September purchases Total cash disbursements 0 0 $ 05 0 $ 0 Saved Prepare a cash budget for July, August, September, and the quarter in total. (Cash deficiency, repayments and interest should be indicated by a minus sign.) September Quarter 0 0 0 Company Cash Budget For the Quarter Ended September 30 July August Beginning cash balance Add collections from customers Total cash available 0 Less cash disbursements Inventory purchases Seling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements 0 Financing Borrowings Repayment Interest Total financing 0 $ Ending cash balance 0 0 0 0 0 0 0 0 0 0 0 05 $ 0 5
