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I need assistance checking/completing the following attachment. Near the end of 2009, the management of Nygaard Sports Co., a merchandising company, prepared the following estimated
I need assistance checking/completing the following attachment.
Near the end of 2009, the management of Nygaard Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2009. Assets Cash Accounts receivable Inventory Total current assets Equipment Less accumulated depreciation Total assets NYGAARD SPORTS COMPANY Estimated Balance Sheet December 31, 2009 Liabilities and Equity $35,500 Accounts payable 520,000 Bank loan payable Taxes payable (due 110,000 3/15/2010) 665,500 Total liabilities $541,000 Common stock 67,625 473,375 Retained earnings Total stockholders' equity $1,138,875 Total liabilities and equity $360,000 15,000 89,000 $464,000 472,000 202,875 674,875 $1,138,875 To prepare a master budget for January, February, and March of 2010, management gathers the following information. a. Nygaard Sports' single product is purchased for $20 per unit and resold for $54 per unit. The expected inventory level of 5,500 units on December 31, 2009, is more than management's desired level for 2010, which is 20% of the next month's expected sales (in units). Expected sales are: January, 7,500 units; February, 9,500 units; March, 11,000 units; and April, 10,500 units. b.Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 63% is collected in the first month after the month of sale and 37% in the second month after the month of sale. For the December 31, 2009, accounts receivable balance, $120,000 is collected in January and the remaining $400,000 is collected in February. c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2009, accounts payable balance, $70,000 is paid in January and the remaining $290,000 is paid in February. d.Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $90,000 per year. e. General and administrative salaries are $144,000 per year. Maintenance expense equals $1,800 per month and is paid in cash. f. Equipment reported in the December 31, 2009, balance sheet was purchased in January 2009. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000; February, $95,000; and March, $28,000. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month's depreciation is taken for the month in which equipment is purchased. g. The company plans to acquire land at the end of March at a cost of $145,000, which will be paid with cash on the last day of the month. h.Nygaard Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $13,050 in each month. i. The income tax rate for the company is 37%. Income taxes on the first quarter's income will not be paid until April 15. Prepare a master budget for each of the first three months of 2010; include the following component budgets (show supporting calculations as needed, and round amounts to the nearest dollar): 7. Monthly sales budgets (showing both budgeted unit sales and dollar sales). (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) NYGAARD SPORTS CO. Sales Budgets January, February, and March 2010 Budgeted Budgeted Units Unit Price January 2010 February 2010 March 2010 Total for the first quarter Budgeted Total Dollars $ $ $ 8. Monthly merchandise purchases budgets. (Round your answers to the nearest dollar amount. Amounts in parentheses do not require a minus sign in front of them. Omit the "$" & "%" signs in your response. ) NYGAARD SPORTS CO, Merchandise Purchases Budgets January, February, and March 2010 January February March Total Next month's budgeted sales % Ratio of inventory to future sales % % Required available merchandise () () () Units to be purchased Budgeted cost per unit $ $ $ $ $ $ $ $ 9. Monthly selling expense budgets.(Input all amounts as positive values. Round your answers to the nearest whole dollar amount. Omit the "$" & "%" signs in your response.) NYGAARD SPORTS CO. Selling Expense Budgets January, February, and March 2010 January February $ $ % % March Total $ % $ Total selling expenses $ $ $ $ 10. Monthly general and administrative expense budgets. (Round your answers to the nearest dollar amount. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Salaries Maintenance Depreciation Total expenses NYGAARD SPORTS CO. General and Administrative Expense Budgets January, February, and March 2010 January February $ $ $ 11. Monthly capital expenditures budgets. (Omit the "$" sign in your response.) NYGAARD SPORTS CO. $ March Total $ $ $ $ Capital Expenditures Budgets January, February, and March 2010 January February $ $ $ $ Equipment purchases Land purchase Total $ $ March 12. Monthly cash budgets. (Round your answers to the nearest dollar amount. Leave no cells blank - be certain to enter "0" wherever required. Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) NYGAARD SPORTS CO. Cash Budgets January, February, and March 2010 January $ Beginning cash balance February March $ $ () $ $ $ $ Total cash available Cash disbursements Sales commissions Sales salaries General & administrative salaries Interest Taxes payable Purchases of equipment Purchase of land Total cash disbursements Preliminary cash balance Ending cash balance Loan balance, end of month () $ $ 13. Budgeted income statement for the entire first quarter (not for each month). (Input all amounts as positive values. Round your answers to the nearest whole dollar amount. Omit the "$" sign in your response.) NYGAARD SPORTS CO. Budgeted Income Statement For Three Months Ended March 31, 2010 $ Cost of goods sold Operating expenses $ Income before taxes Income taxes $ 14. Budgeted balance sheet as of March 31, 2010. (Round your answers to the nearest dollar amount. Leave no cells blank - be certain to enter "0" wherever required. Be sure to list the assets in order of their liquidity. Omit the "$" sign in your response.) NYGAARD SPORTS CO. Budgeted Balance Sheet March 31, 2010 Liabilities $ Assets Total Current Assets $ Total Liabilities $ Equipment Less accum. Depreciation Total assets $ Total stockholders' equity $ Total Liabilities & Equity $Step by Step Solution
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