In-class Assessment - Thursday, November 14, 2019 The following information is available for the Barkery, a gourmet pet food and to Cod and toys store: 1. Balance sheet information as of September 30, 2019: $ 21,000 34.500 20.000 119,075 Current Assets Cash Accounts Receivable Inventory Equipment (net) Current Liabilities Accounts Payable Interest Payable Notes Payable Common stock Retained earnings 11.550 2,625 70,000 35.000 75,400 2. Recent and anticipated sales: August September October November December $70,000 $60,000 $90,000 $110,000 $130,000 3. Credit sales: Sales are 60% for credit and 40% cash. Assume that the credit accounts are collected 15% within the month of sale, 72% within the month following the sale, 11% within the second month following the sale and 2% is uncollectible and written off immediately as a bad debt. 4. Cost of goods sold is 55% of sales. We pay for 65% of the purchases in the month of purchase and the remaining 35% of the purchases in the month following the purchase. 5. Inventory is equal to $20,000 at all times. 6. Operating costs: Salaries and wages average 26% of monthly revenues, other monthly operating costs are $4,100. Assume that these costs are paid out each month. Depreciation is $720 per month. 7. The note payable is due on June 30, 2021. Accrue monthly interest at 5% per annum that will be paid with the note payable balance on June 30, 2021. 8. Assume that a minimum cash balance of $15.000 must be maintained. Assume also that all borrowing is effective at the beginning of the month and all repayments are made at the end of the month of repa to pay off the entire loan ba the month of repayment. Loans are repaid when sufficient cash is available the entire loan balance. Interest of 6% is paid when loans are repaid. You accrue interest for the quarter on any unpaid interest. Management does not want arrow any more cash than is necessary and wants to repay as soon as cash 18 available. REQUIRED: On the basis of the facts as given above, prepare the following schedules using a spreadsheet software package: A. Budgeted monthly cash receipts for October-December, 2019. B. Budgeted monthly cash disbursements for inventory purchases for October December, 2019. C. Budgeted monthly cash disbursements for operating costs and for total monthly cash disbursements for October-December, 2019. D. Cash budget for October-December, 2019. E. Budgeted income statement for the three-month period ending December 31, 2019. F. Balance sheet on December 31, 2019. CHECK FIGURES: Part A-F: Total Cash Collections - October - Total purchases in dollars - October - Total payments for purchases in October - Total cash disbursements for October - Ending cash balance in October - Net income for the quarter - Total Assets as of 12/31/19 - $74,640 $49,500 $43,725 $71,225 $24,415 $43,405 $252,330
