(Master Budget HW problem)
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:
A. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances:
Doble Credit Cash 5 61090 Accounts receivable 216 800 Inventory 60 .900 Buildings and equipment ( net ) 371 090 Accounts payable 8 91 425 Common stock 500.090 Retained earnings 118.275 $ 709 700 5709 TOO\fRequired: Using the data above, complete the following statements and schedules for the first quarter: 1. Schedule of expected cash collections: Schedule of Expected Cash Collections January February March Quarter Cash sales S 81,200 5 120,600 63,600 5 265,400 Credit sales 216,800 324,800 482,400 1,024,000 Total collections $ 298,000 $ 445,400 $ 546,000 5 1,289,400 2-a. Merchandise purchases budget: Merchandise Purchases Budget January February March Quarter Budgeted cost of goods sold 243,600* $ 361,800 $ 190,800 $ 796,200 Add desired ending inventory 90,4501 47,700 32,100 32,100 Total needs 334,050 409,500 222,900 828,300 Less beginning inventory 60,900 90,450 47,700 60,900 Required purchases 273,150 319,050 $ 175,200 $ 767,400 *$406,000 sales x 60% cost ratio = $243,600. +$361,800 x 25% = $90,450. 2-b. Schedule of expected cash disbursements for merchandise purchases: Schedule of Expected Cash Disbursements for Merchandise Purchases January February March Quarter December purchases 5 91,425 91,425 January purchases 136,575 136,575 273, 150 February purchases 159,525 159,525 319,050 March purchases 87,600 87,600 Total cash disbursements for purchases 5 228,000 $ 296, 100 $ 247 , 125 $ 771,225Cash budget . ( Cash deficiency , repayments and Interest should be Indicated by a minus sign . ) Hillyard Compan Cash Budget January February March Quarter Beginning cash balance 10DO Add cash collections 298 000 Total cash available 359 090 Less cash disbursements urchases of inventory 228 010 Selling and administrative expenses 28 480 Purchases of equipment Cash dividends 45, 900 Total cash disbursements 480 Excess ( deficiency ) of cash ( 42.480) Financing Borrowings Repayments Interest Total financing Ending cash balance ( 42.4801 8 01 5 01 54 Prepare an absorption costing Income statement for the quarter ending March 31 Hillyard Compan Income Statement For the Quarter Ended March 31 Sales Cost of goods sold Selling and administrative expenses Depreciation Salaries and wages Advertising Shipping Other expenses Net income5 . Prepare a balance sheet as of March 31 Hillyard Company Balance Shee March 31 Assets Current assets Cash Account receivable Inventory Total current assets Total assets Liabilities and Stockholders Equity Current liabilities Account payable Stockholders equity Total liabilities and stockholders equity
