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need all thanks. Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow

need all thanks.
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Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for April-July are: 430,000 960,000 410,000 310,000 287,000 217,000 Sales 301,000 672,000 2 Cross margin Selling and administrative expensess 29,000 288,000 23,000 Selling expense Adninintrative expense* 83,000 91,000 52,000 32,600 Total selling and administrative expenses123.500 144 600 84600 60-000 Net operating ineome 500 143,40038,400 33,000 Includes $13,000 of depreciation each month. b. Sales are 20% for cash and 80% on account. C. Sales on account are collected over a three-month period with 10% collected in the month of sale: 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale, February's sales totaled $145,000, and March's sales totaled $205,000 d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $87,500 e. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $60,200. f. Dividends of $21,000 will be declared and pald in April. g. Land costing $29,000 will be purchased for cash in May. h. The cash balance at March 31 is $43,000; the company must maintain a cash balance of at least $40,000 at the end of each month g. Land costing $29,000 will be purchased for cash in May h. The cash balance at March 31 is $43,000; the company must maintain a cash balance of at least $40,000 at the end of each month. i. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter he company's president is interested in knowing how reducing inventory levels and collecting accounts receivable sooner will impact he cash budget. He revises the cash collection and ending inventory assumptions as follows: a. Sales continue to be 20% for cash and 80% on credit. However, credit sales from April, May, and June are collected over a three- month period with 25% collected in the month of sale, 65% collected in the month following sale, and 10% in the second month following sale. Credit sales from February and March are collected during the second quarter using the collection percentages specified in the main section. b. The company maintains its ending inventory levels for April, May, and June at 15% of the cost of merchandise to be sold in the following month. The merchandise inventory at March 31 remains $60,200 and accounts payable for inventory purchases at March 31 remains $87,500. equired: Using the president's new assumptions in (a) above, prepare a schedule of expected cash collections for April, May, and June and for he quarter in total .Using the president's new assumptions in (b) above, prepare the following for merchandise inventory . A merchandise purchases budget for April, May, and June. . A schedule of expected cash disbursements for merchandise purchases for April, May, and June and for the quarter in total. . Using the president's new assumptions, prepare a cash budget for April, May, and June, and or the quarter in total. Complete this question by entering your answers in the tabs below Required 1Required 2A Required 28 Required 3 Using the president's new assumptions in (a) above, prepare a schedule of expected cash collections for April, May, and June and for the quarter in total. Schedule of Expected Cash Collections April May Quarter June Cash sales Sales on account: February March April May June Total cash collections S Required 1 Required 2ARequired 2B Required 3 Using the president's new assumptions in (b) above, prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June. Merchandise Purchases Budget April May June Total needs Required inventory purchases Required 1 Required 2ARequired 28 Required 3 Using the president's new assumptions in (b) above, prepare the following for merchandise inventory, a schedule of expected cash disbursements for merchandise purchases for April, May, and June and for the quarter in total Schedule of Expected Cash Disbursements for Merchandise Purchases June April May Quarter April purchases May purchases June purchases Total cash disbursements Required 2A Required 3> Using the president's new assumptions, prepare a cash budget for April, May, and June, and for the quarter in total. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Garden Sales,Inc. Cash Budget For the Quarter Ended June 30 April May Quarter June Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayment Interest Total financing Ending cash balance o S

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