HW Score: 75.06%, 3 of 4 p %) FAM7-A1 (similar to) Question Help You are the new manager of the local IT Electronics store Top management of IT Electronics is convinced that management training should include the active participation of store managers in the budgeting process. You have been asked to prepare a complete master budget for your store for June July, and August. All accounting is done centrally so you have no expert help on the premises. In addition, tomorrow the branch manager and the assistant controller will be here to examine ard your work at that time, they will assist you in formulating the final budget document. The idea is to have you prepare the initial budget on your own so that you gain more + confidence about accounting matters. You want to make a favorable impression on your superiors, so you gather the following financial statement and sales data as of dece May 31, 20x8 (Click the icon to view the data) Click the icon to view the additional information ) Read the requirements June July August LI Credit sales 200,000 104.000 104,000 purd 50.000 26.000 26,000 Cash sales ans pa 250,000 $ 130,000 $ 130.000 Total sales ty Now prepare a schedule of cash collections from customers Schedule b: Cash collections from customers June July 26000 August 20000 deliver 70% of 50000 ys wages ut each me For current month salos For sales from 1 month prior For sales from 2 months prior Total collections from customers RATING o HI b ) UIT Electronics store. Top management of IT Electronics is convinced that management training e budgeting process. You have been asked to prepare a complete master budget for your store f have no expert help on the premises. In addition, tomorrow the branch manager and the assistan ist TS pige Data Table - x anci ) Cash $ e 2000 Inventory 50.0 Accounts receivable 1,123,200 May 250.0 Net furniture and fixtures 15,100 Recent and Projected Sales 167,500 April $ 110,000 110,000 45,000 June 250,000 350,800 July 130,000 174,500 August 130,000 176,300 September 110,000 $ h collect Total assets Accounts payable s from Owners' equity Total liabilities $ and owners' equities 350.800 Print Done stomers C hapter 7 Homework 1 of 4 (4 complete) HW ar to More Info - X Credit sales are 80% of total sales. Sixty percent of each credit account is collected in the month following the sale and the remaining 40% is collected in the subsequent month. Assume that bad debts are negligible and can be ignored. The accounts receivable on May 31 are the result of the credit sales for April and May (0.40 0.80 x $110,000) + (1.0 x 0.80 x $110.000) = $123,200 The policy is to acquire enough inventory each month to equal the following month's projected cost of goods sold. All purchases are paid for in the month following purchase. The average gross profit on sales is 33%. Salaries, wages, and commissions average 30% of sales: all other variable expenses are 2% of sales. Fixed expenses for rent, property taxes, and miscellaneous payroll and other items are $6,000 monthly Assume that these variable and fixed of a expenses require cash disbursements each month Depreciation is $900 monthly In June $7,000 is going to be disbursed for fixtures acquired and recorded in furniture and fixtures in ectie May The May 31 balance of accounts payable includes this amount Assume that a minimum cash balance of $3,000 is to be maintained. Also assume that all borrowings are effective at the beginning of the month and all repayments are made at the end of the month of repayment Interest is compounded and added to the outstanding balance each month, but interest is prio paid only at the ends of months when principal is repaid. The interest rate is 5% per annum round interest computations and interest payments to the nearest dollar. Interest payments may be any as prie dollar amount, but all borrowing and repayments of principal are made in multiples of $1,000 om cu Print Done