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Apr 2018 May 2018 Jun 2018 6 mos total 03 104 105 Heron, Inc. 106 107 Budgeted Income Statement 108 For the 6 mos ending June 30, 2018 109 110 Sales, net Jan 2018 Feb 2018 Mar 2018 111 Cost of Goods Sold 112 Gross margin 113 Total operating expenses 114 Net Income 115 116 Heron, Inc. 117 Budgeted Statement of Retained Earnings 118 For the 6 mos ending June 30, 2018 119 120 Retained Earnings, beginning $ 370,660 121 Add Net Income 122 Retained Earnings, ending 123 124 Heron, Inc. 125 Budgeted Balance Sheet 126 As of June 30, 2018 127 128 Assets 129 Current Assets 130 Cash 131 Accounts Receivable 132 Office Supplies 2,000 133 Merchandise Inventory Total Current Assets 135 Plant and Equipment 138 Buldings and Equipment 1,050.000 137 Accumulated Depreciation (525.000) 138 Total Plant and Equipment 130 Total cate H Budget Ready Type here to search 54 9 1 D E B 115 116 Heron, Inc. 117 Budgeted Statement of Retained Earnings 118 For the 6 mos ending June 30, 2018 119 120 Retained Earnings, beginning $ 370,660 121 Add Net Income 122 Retained Earnings, ending 123 124 Heron, Inc. 125 Budgeted Balance Sheet 126 As of June 30, 2018 127 128 Assets: 129 Current Assets: 130 Cash 131 Accounts Receivable 132 Office Supplies 2,000 133 Merchandise Inventory 134 Total Current Assets 135 Plant and Equipment: 136 Buildings and Equipment 1,050,000 137 Accumulated Depreciation (535,000) 138 Total Plant and Equipment 139 Total assets 140 200 000 141 Liabilities: 142 Accounts Payable 143 144 Equity 145 Common Stock 146 Retained Earnings Total Equity 148 Total liabilities and equity 149 150 Budget Ready Type here to search o i IMO INFORMATION FOR HENRON, INC. BUDGET PROJECT 1. Heron, Inc. is a company that re-sells one product, a lawn chair. A contractor makes the product exclusively for Heron, so Heron has no manufacturing costs. Henron sells each chair for $10 per unit, but plans to raise the sales price to $11.00 per unit beginning May 1, 2018 2. The estimated sales (in units) are as follows: Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 12,000 13,000 9,000 10,000 13,000 Apr 18 May 18 18,000 15,000 Jun 18 18,000 Jul 18 17,000 3. They expect that 60% of any month's sales are for cash, and the remaining 40% are on credit of the credit sales, they expect to collect 20% in the month of the sale, 70% in the following month, and 10% in the month after that. 4. The firm's policy regarding inventory is to stock (i.e. have in ending inventory) 30% of the estimated sales for the next month. 5. Each lawn chair costs Henron $6. They plan to pay for 30% of the inventory purchases in the month of purchase, and pay the remaining 70% the following month (i.e. all of the previous month's Accounts Payable are paid off by the end of any month) Page 1 of 2 6. Monthly operating expenses consist of the following (any cash expenses are paid as incurredy, Salaries and Wages Expense S 17 000 revenue 70cl IHI 6. Monthly operating expenses consist of the following (any cash expenses are paid as incurred) Salaries and Wages Expense $17,000 Sales Commissions 7% of sales revenue Rent Expense $6,000 Supplies Expense $2,000 Other Overhead Expense $5,000 Depreciation Expense $2,500 7. Henron must maintain a minimum cash balance of $30,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments Ignore interest on the loan in your calculations, but only borrow what you need and pay off any loans as soon as possible. 8. Cash on hand as of December 31, 2017 is expected to be $15,000. In addition, there will be no notes payable (loan balance) as of this date. 9. See below the other Balance Sheet accounts with their balances as of the beginning of the year. Buildings and Equipment $1,050,000 Accumulated Deprecation $ 520,000 Note: You must add current year depreciation expense to Common Stock $ 200.000 accumulated depreciation Retained Earnings $ 370,660 10. Henron maintains office supplies of $2.000 at the end of each month. 11. Accounts receivable consists of the credit sales that have not been received Accounts payable consists of inventory purchases that have not yet been paid. Type here to search ORI Comprehensive Problem #2 - Budget Project Checkpoints Cash Collections Budget Total Cash Collections, January: Total Cash Collections, 6 mos total: $102,400 $841,120 Purchase Budget Total Purchases cost, 6 mos total: $512,400 Operating Expense Budret Total Operating Expenses, 6 mos total: $255,620 Cash Budget Cash bal before financing, January: Ending Cash Balance, June: $ 14,800 $ 127,880 Budgeted Income Statement Net Income, January: Cost of Goods Sold, 6 mos total: $ (2,800) $498,000 Budgeted Balance Sheet Total Assets $746,760 o