Question
HUSH Clean Cosmetics (HCC), an all natural & organic mineral makeup company, is considering whether to open a new store. The store can be ready
HUSH Clean Cosmetics (HCC), an all natural & organic mineral makeup company, is considering whether to open a new store. The store can be ready to open on July 1, 2022. To make the decision, the planning committee requires a master budget for the stores first quarter of operation (July, August, and September of 2022). Required: Construct quarterly master budget for the three month period, July to September, based on the following information. Please answer ALL four parts. a. July sales are estimated to be $480,000 of which $80,000 will be cash and $400,000 will be credit. The company expects sales to grow 10% per month. Prepare a sales budget. b. The company expects to collect 100% of accounts receivable in the month following the sale. Prepare a schedule of expected cash receipts. c. Cost of goods sold will be 50% of sales. Company policy is to budget an ending inventory balance equal to 25% of the next months projected cost of goods sold. Assume HCC expects October cost of goods sold to be $345,000. Prepare an inventory purchases budget. d. All inventory purchases will be on account. The company would pay 75% of accounts payable in the month of purchase. It will pay the remaining 25% in the following month. Prepare a schedule of expected cash payments for inventory purchases.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started