I NEED SPECIFIC ANSWERS FOR PART 5,7,8,9 ONLY . THANKS
Required information The following information applies to the questions displayed below.] We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank." This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm's top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm's main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal's General Manager of Marketing, has recently completed a sales forecast. She believes the company's sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month's sales. Then Wilcox expects sales to remain constant for several months. Intercoastal's projected balance sheet as of December 31, 20x0, is as follows Cash Accounts receivable Marketable securities Inventory Buildings and equipment (net of accumulated depreciation) Total assets $55,000 168,000 20,000 154,000 620,000 $1,017,000 $ 147,000 10,500 4, 800 360,000 350,000 144,70e $1,017,000 Accounts payable Bond interest payable Property taxes payable Bonds payable (7%; due in 20x6) Common stock Retained earnings Total liabilities and stockholders' equity Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated 1. Projected sales for December of 20x0 are $400,000. Credit sales typically are 60 percent of total sales. Intercoastal's credit experience indicates that 30 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month 2. Intercoastal's cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 50 percent of each month's purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month's projected cost of goods sold 3. Hanson has estimated that Intercoastal's other monthly expenses will be as follows Sales salaries Advertising and promotion Administrative salaries Depreciation Interest on bonds Property taxes $ 19,00 16,000 19,000 15,000 2,100 1,200 In addition, sales commissions run at the rate of 3 percent of sales 4. Intercoastal's president, Davies-Lowry, has indicated that the firm should invest $115,000 in an automated inventory handling system to control the movement of inventory in the firm's warehouse just after the new year begins. These equipment purchases will be financed primarily from the firm's cash and marketable securities. However, Davies-Lowry believes that Intercoastal needs to keep a minimum cash balance of $15,000. If necessary, the remainder of the equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $75,000 on the last day of each quarter 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 1. Sales budget 20x1 20x0 December January February March First Quarter $400,000S 440,000S 484,000 532,400 S1,456,400 582,560 Sales on account240,000 264,000290,400 319,440873,840 Total sales 193,600212,960 160,000 Cash sales 176,000 Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 2. Cash receipts budget: 20x1 January February March First Quarter 176,000193,600 212,960582,560 262,152 556,080 S 423,200 S 465,520 S 512,072 S 1,400,792 Cash sales Cash collections from credit sales made during current month Cash collections from credit sales made during preceding month168,000 Total cash receipts 95,8322 203,280 87,120 184,800 79,200 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 3. Purchases budget 20x0 20x1 December January February March First Quarter $ 280,000 308,000 338,800 $ 372,680 1,019,480 Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less: Expected beginning inventory Purchases 154,000$ 169,400 S 186,340 186,340 186,340 434,000 S 477,400 525,140 $ 559,020 S 1,205,820 169,400 154,000 $294,000 S 323,400 140,000 186,340 355,740 372,680 S 1,051,820 154,000 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 4. Cash disbursements budget: 20x1 January February March First Quarter Inventory purchases Cash payments for purchases during th Cash payments for purchases during the preceding month Total cash payments for inventory purchases Other expenses current month 84,700 S 93,170 247,870 S 154,700 S 177,870 S 186,340 S 518,910 70,000 84,700 9,00019,000 19,000 57,000 48,000 57,000 12,600 7,200 43,692 79,800 75,720 69,972 S 225,492 S 234,500 253,590 256,312 $ 744,402 Sales salaries Advertising and promotion Administrative salaries nterest on bonds Property taxes Sales commissions 16,000 19,000 12,600 16,000 16,000 19,000 19,000 7,200 13,200 15,972 14,520 Total cash payments for other expenses Total cash disbursements Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 5. Complete the first three lines of the summary cash budget. Then do the analysis of short-term financing needs in requirement (6). Then finish requirement (5). 20x1 January February March First Quarter Cash receipts (from part 2) Less: Cash disbursements (from part 4) Change in cash balance during period due to operations Sale of marketable securities (1/2/x1) Proceeds from bank loan (1/2/x1) Purchase of equipment Repayment of bank loan (3/31/x1) Interest on bank loan Payment of dividends Change in cash balance during first quarter Cash balance, 1/1/x1 Cash balance, 3/31/x1 Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 6. Calculation of required short-term borrowing S 55,000 15,000 is 40,000 20,000 S 60,000 115,000 S (55,000) Projected cash balance as of December 31, 20x0 Less: Minimum cash balance Cash available for equipment purchases Projected proceeds from sale of marketable securities Cash available Less: Cost of investment in equipment Required short-term borrowing Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 7. Prepare Intercoastal Electronics' budgeted income statement for the first quarter of 20x1. (Ignore income taxes.) INTERCOASTAL ELECTRONICS COMPANY Budgeted Income Statement For the First Quarter of 20x1 Selling and administrative expenses Total selling and administrative expenses Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 8. Prepare Intercoastal Electronics' budgeted statement of retained earnings for the first quarter of 20x1. INTERCOASTAL ELECTRONICS COMPANY Budgeted Statement of Retained Earnings For the First Quarter of 20x1 Retained earnings, 12/31/x0 Retained earnings, 3/31/x1 9. Prepare Intercoastal Electronics' budgeted balance sheet as of March 31, 20x1. (Hint: On March 31, 20x1, Bond Interest Payable is $4,200 and Property Taxes Payable is $1,200.) INTERCOASTAL ELECTRONICS COMPANY Budgeted Balance Sheet March 31, 20x1 0 Total assets Total liabilities and stockholders' equity S Required information The following information applies to the questions displayed below.] We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank." This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm's top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm's main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal's General Manager of Marketing, has recently completed a sales forecast. She believes the company's sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month's sales. Then Wilcox expects sales to remain constant for several months. Intercoastal's projected balance sheet as of December 31, 20x0, is as follows Cash Accounts receivable Marketable securities Inventory Buildings and equipment (net of accumulated depreciation) Total assets $55,000 168,000 20,000 154,000 620,000 $1,017,000 $ 147,000 10,500 4, 800 360,000 350,000 144,70e $1,017,000 Accounts payable Bond interest payable Property taxes payable Bonds payable (7%; due in 20x6) Common stock Retained earnings Total liabilities and stockholders' equity Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated 1. Projected sales for December of 20x0 are $400,000. Credit sales typically are 60 percent of total sales. Intercoastal's credit experience indicates that 30 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month 2. Intercoastal's cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 50 percent of each month's purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month's projected cost of goods sold 3. Hanson has estimated that Intercoastal's other monthly expenses will be as follows Sales salaries Advertising and promotion Administrative salaries Depreciation Interest on bonds Property taxes $ 19,00 16,000 19,000 15,000 2,100 1,200 In addition, sales commissions run at the rate of 3 percent of sales 4. Intercoastal's president, Davies-Lowry, has indicated that the firm should invest $115,000 in an automated inventory handling system to control the movement of inventory in the firm's warehouse just after the new year begins. These equipment purchases will be financed primarily from the firm's cash and marketable securities. However, Davies-Lowry believes that Intercoastal needs to keep a minimum cash balance of $15,000. If necessary, the remainder of the equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $75,000 on the last day of each quarter 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 1. Sales budget 20x1 20x0 December January February March First Quarter $400,000S 440,000S 484,000 532,400 S1,456,400 582,560 Sales on account240,000 264,000290,400 319,440873,840 Total sales 193,600212,960 160,000 Cash sales 176,000 Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 2. Cash receipts budget: 20x1 January February March First Quarter 176,000193,600 212,960582,560 262,152 556,080 S 423,200 S 465,520 S 512,072 S 1,400,792 Cash sales Cash collections from credit sales made during current month Cash collections from credit sales made during preceding month168,000 Total cash receipts 95,8322 203,280 87,120 184,800 79,200 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 3. Purchases budget 20x0 20x1 December January February March First Quarter $ 280,000 308,000 338,800 $ 372,680 1,019,480 Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less: Expected beginning inventory Purchases 154,000$ 169,400 S 186,340 186,340 186,340 434,000 S 477,400 525,140 $ 559,020 S 1,205,820 169,400 154,000 $294,000 S 323,400 140,000 186,340 355,740 372,680 S 1,051,820 154,000 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 4. Cash disbursements budget: 20x1 January February March First Quarter Inventory purchases Cash payments for purchases during th Cash payments for purchases during the preceding month Total cash payments for inventory purchases Other expenses current month 84,700 S 93,170 247,870 S 154,700 S 177,870 S 186,340 S 518,910 70,000 84,700 9,00019,000 19,000 57,000 48,000 57,000 12,600 7,200 43,692 79,800 75,720 69,972 S 225,492 S 234,500 253,590 256,312 $ 744,402 Sales salaries Advertising and promotion Administrative salaries nterest on bonds Property taxes Sales commissions 16,000 19,000 12,600 16,000 16,000 19,000 19,000 7,200 13,200 15,972 14,520 Total cash payments for other expenses Total cash disbursements Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 5. Complete the first three lines of the summary cash budget. Then do the analysis of short-term financing needs in requirement (6). Then finish requirement (5). 20x1 January February March First Quarter Cash receipts (from part 2) Less: Cash disbursements (from part 4) Change in cash balance during period due to operations Sale of marketable securities (1/2/x1) Proceeds from bank loan (1/2/x1) Purchase of equipment Repayment of bank loan (3/31/x1) Interest on bank loan Payment of dividends Change in cash balance during first quarter Cash balance, 1/1/x1 Cash balance, 3/31/x1 Required Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 6. Calculation of required short-term borrowing S 55,000 15,000 is 40,000 20,000 S 60,000 115,000 S (55,000) Projected cash balance as of December 31, 20x0 Less: Minimum cash balance Cash available for equipment purchases Projected proceeds from sale of marketable securities Cash available Less: Cost of investment in equipment Required short-term borrowing Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. 7. Prepare Intercoastal Electronics' budgeted income statement for the first quarter of 20x1. (Ignore income taxes.) INTERCOASTAL ELECTRONICS COMPANY Budgeted Income Statement For the First Quarter of 20x1 Selling and administrative expenses Total selling and administrative expenses Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements 8. Prepare Intercoastal Electronics' budgeted statement of retained earnings for the first quarter of 20x1. INTERCOASTAL ELECTRONICS COMPANY Budgeted Statement of Retained Earnings For the First Quarter of 20x1 Retained earnings, 12/31/x0 Retained earnings, 3/31/x1 9. Prepare Intercoastal Electronics' budgeted balance sheet as of March 31, 20x1. (Hint: On March 31, 20x1, Bond Interest Payable is $4,200 and Property Taxes Payable is $1,200.) INTERCOASTAL ELECTRONICS COMPANY Budgeted Balance Sheet March 31, 20x1 0 Total assets Total liabilities and stockholders' equity S
