Once you have completed the budget, determine the following balances. On the template, make sure you link your answer to the appropriate cell. Failure to link to the appropriate cell will result in zero credit for that answer. Failure to complete this part of the assignment will result in a ZERO for the entire assignment, regardless if you completed the six budgets.
- Total Cash Receipts for September and October
- Total Inventory Purchases for September and October
- Total Cash Payments for Inventory Purchases for September and October
- Total Variable Selling & Administrative Costs for September and October
- Total Fixed Selling & Administrative Costs for September and October
- Total Cash Payments (S&A) for September and October
- Total Cash Surplus (Deficit) for September and October
- Total New Borrowing (Repayments) for September and October
- The Contribution Margin for September and October
- Total Interest Expense for September and October
- Pre-tax Income for September and October
- Income tax expense for September and October
- Ending Balance of Accounts Receivable for September and October
- Ending Balance of Inventory for September and October
- Ending Balance of Prepaid Insurance for September and October
- Ending Balance of Accumulated Depreciation for September and October
- Ending Balance of Accounts Payable for September and October
- Ending Balance of Commissions Payable for September and October
- Ending Balance of Long-Term Debt for September and October
- Ending Balance of Retained Earnings for September and October
The Bobcat Beverage Company, Inc. sells a wide variety of beverages and snack foods. The Bobcat Beverage Co., Inc. Sales Forecast for Sept. to Nov., 2019 September October November Sales Revenue (all Sales are $800,000 $700,000 $800,000 on Credit) Bobcat Beverage Company, Inc Balance Sheet As of August 31, 2019 Assets: Cash Accounts receivable Inventory Prepaid Insurance Current assets $ 25,800 595,000 50,688 27,500 $ 698,988 Liabilities: Accounts payable Sales commissions payable Advertising Expense Payable Income taxes payable Dividends payable Current liabilities $ 81,859 59,500 121,250 22,000 0 $ 284,609 Long-term debt 220,000 Property, Plant & Equipment Land Plant & Equipment Accumulated depreciation 100,000 300,000 (100,000) Stockholders' equity Common stock Retained earnings Total SE & Liabilities $ Total assets 89,500 404,879 998.988 $ 998.988 I Balance Sheet As of August 31, 2020 Assets: Cash $ 81,859 Accounts receivable 59,500 Inventory 121,250 Liabilities: $ Accounts payable 25,800 Sales commissions 595,000 payable Advertising Expense 50,688 Payable Income taxes payable 27,500 $ Dividends payable 698,988 Current liabilities Prepaid Insurance 22,000 Current assets $ 284,609 Copyright of AcctExcel.com LLC 2020. Use by permission only. Long-term debt 220,000 Property. Plant & Equipment Land Land 100,000 Plant & Equipment Stockholders' equity 300,000 Common stock $ 89,500 Accumulated depreciation (100,000) 404,879 Retained earnings Total SE & Liabilities Total assets $ 998.988 $ 998,988 Bobcat Beverage Company Balance Sheets As of August 31, 2019 ASSETS CURRENT ASSETS Cash $ 25,800 Accounts Receivable $ 595,000 Inventory $ 50,688 Prepaid Insurance $ 27,500 TOTAL CURRENT ASSETS $ 698,988 PROPERTY PLANT & EQUIPMENT Land $ 100,000 Equipment $ 300,000 Accumulated Depreciation $ (100,000) TOTAL PPE $ 300,000 TOTAL ASSETS $ 998.988 LIABILITIES & STOCKHOLDERS EQUITY 3 CURRENT LIABILITIES 1 Accounts Payable $ 81,859 5 Commissions Payable 59,500 5 Advertising Expense Payable $ 121,250 7 Income Taxes Payable 22,000 B Dividends Payable $ 9 TOTAL CURRENT LIABILITIES $ 284,609 0 1 LONG TERM DEBT $ 220,000 2 3 STOCKHOLDERS EQUITY 4 Common Stock $ 89,500 5 Retained Earnings $ 404,879 16 TOTAL STOCKHOLDERS EQUITY $ 494,379 7 38 TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 998,988 Expected Sales (all sales are credit sales) September $800,000 Collections of Accounts Receivable Month of Sale Month following Sale 2996 719 Cost of Goods Sold percentage of sales 3595 Inventory Purchase Information Purchases paid in current month Purchases paid in next month Purchases are al on credit Planned ending inventory as a percentage of next month's Cost of Goods Sold 7496 26% 12% Sales Commission Information Sales commissions as a percentage of sales Sales commissions are paid the month after they are incurred 755 Advertising Expense Information Variable Rate Fixed Cost 15 50% $80,000 12 $30,000 $50,000 13.00N Insurance policy Information # of months of insurance coverage paid for each year The policy period is from August 1 to July 31 each year The premium was paid on July 31, 2019 The premium will be charged to prepaid insurance 1 2 General and Administrative Expense Information 3 Fbed cost portion 4 Variable rate (as a percentage of sales) 5 Seling and administrative expenses are paid in the month incurred 6 37 Fixed Asset Information 38 Purchase Land on September 15, 2019 39 Current Depreciation expense per month 40 41 Long-Term Loan Interest Information 12 The interest rate on the long-term debt per month is 43 Interest is paid on the principle balance at the beginning of the month 44 Minimum Cash Balance 45 New borrowing must be in $1,000 increments 46 47 Tax Information 48 Income tax rate 49 are paid in the month after they are incu (expensed) 50 51 Dividend Information 52 Cash dividend declared on September 20, 2019 53 - Cash dividend paid on October 15, 2019 260.000 10.000 $25,000 25 $30.000 Policies and Plans used by The Bobcat Beverage Company, Inc., in budgeting 1. All Sales are on Credit. Sales are collected 29% in the month of sale and 71% in the month following sale. 2. Cost of goods sold is budgeted to be 35% of sales. 3. The Bobcat Beverage Company, Inc. plans to end each month with inventory levels equal to 12% of the next month's cost of sales. 4. The company pays for 74% of the purchases of merchandise in the month of the purchase and 26% in the following month. 5. The Bobcat Beverage Company, Inc. pays a sales commission of 7.5% on all sales. The selling commission is paid in the month after the salesmen earn the commission. 6. The company believes that advertising expense is a mixed cost. Based on an analysis of data from previous years, they determine that the best estimate of advertising expense is 15.5% of sales plus $80,000. T 7. The company pays all of its advertising expense in the month AFTER it is incurred. 8. The Bobcat Beverage Company, Inc. estimates its general and administrative expenses to be equal to 13% of budgeted sales plus $50,000. The general and administrative expenses are paid in the month in which they are incurred. 9. Depreciation is $10,000 per month on the property, plant and equipment owned on August 31, 2020 for the period of this budget. 10. On July 31, 2020, the company purchased and paid cash of $30,000 for a twelve- month policy covering the period August 1, 2020 to July 31, 2020 and recorded the cost in Prepaid Insurance. 11. On September 15, 2020, the company purchased Land for $260,000, paying cash. 12. The Bobcat Beverage Company, Inc. records interest expense and accrues interest payable at the rate of 1% per month (simple interest) based on the beginning balance of Long-Term Debt for that month. The Bobcat Beverage Company, Inc. will pay interest in the month it is incurred. 13. The Bobcat Beverage Company must maintain a minimum cash balance of $25,000. If it must borrow any funds, it must borrow in $1,000 increments. Any excess cash will be used to pay down long-term debt. The company may either borrow funds or repay funds, but not both in the same month. 14. The Bobcat Beverage Company, Inc. records income tax expense and accrues income tax payable monthly using a 25% estimated tax rate. Income taxes are paid in the month AFTER they are incurred. 15. The company will declare a cash dividend on September 20, 2020 for $30,000. The cash dividend will be paid on October 15, 2020. No other dividends were declared or paid. The Bobcat Beverage Company, Inc. sells a wide variety of beverages and snack foods. The Bobcat Beverage Co., Inc. Sales Forecast for Sept. to Nov., 2019 September October November Sales Revenue (all Sales are $800,000 $700,000 $800,000 on Credit) Bobcat Beverage Company, Inc Balance Sheet As of August 31, 2019 Assets: Cash Accounts receivable Inventory Prepaid Insurance Current assets $ 25,800 595,000 50,688 27,500 $ 698,988 Liabilities: Accounts payable Sales commissions payable Advertising Expense Payable Income taxes payable Dividends payable Current liabilities $ 81,859 59,500 121,250 22,000 0 $ 284,609 Long-term debt 220,000 Property, Plant & Equipment Land Plant & Equipment Accumulated depreciation 100,000 300,000 (100,000) Stockholders' equity Common stock Retained earnings Total SE & Liabilities $ Total assets 89,500 404,879 998.988 $ 998.988 I Balance Sheet As of August 31, 2020 Assets: Cash $ 81,859 Accounts receivable 59,500 Inventory 121,250 Liabilities: $ Accounts payable 25,800 Sales commissions 595,000 payable Advertising Expense 50,688 Payable Income taxes payable 27,500 $ Dividends payable 698,988 Current liabilities Prepaid Insurance 22,000 Current assets $ 284,609 Copyright of AcctExcel.com LLC 2020. Use by permission only. Long-term debt 220,000 Property. Plant & Equipment Land Land 100,000 Plant & Equipment Stockholders' equity 300,000 Common stock $ 89,500 Accumulated depreciation (100,000) 404,879 Retained earnings Total SE & Liabilities Total assets $ 998.988 $ 998,988 Bobcat Beverage Company Balance Sheets As of August 31, 2019 ASSETS CURRENT ASSETS Cash $ 25,800 Accounts Receivable $ 595,000 Inventory $ 50,688 Prepaid Insurance $ 27,500 TOTAL CURRENT ASSETS $ 698,988 PROPERTY PLANT & EQUIPMENT Land $ 100,000 Equipment $ 300,000 Accumulated Depreciation $ (100,000) TOTAL PPE $ 300,000 TOTAL ASSETS $ 998.988 LIABILITIES & STOCKHOLDERS EQUITY 3 CURRENT LIABILITIES 1 Accounts Payable $ 81,859 5 Commissions Payable 59,500 5 Advertising Expense Payable $ 121,250 7 Income Taxes Payable 22,000 B Dividends Payable $ 9 TOTAL CURRENT LIABILITIES $ 284,609 0 1 LONG TERM DEBT $ 220,000 2 3 STOCKHOLDERS EQUITY 4 Common Stock $ 89,500 5 Retained Earnings $ 404,879 16 TOTAL STOCKHOLDERS EQUITY $ 494,379 7 38 TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 998,988 Expected Sales (all sales are credit sales) September $800,000 Collections of Accounts Receivable Month of Sale Month following Sale 2996 719 Cost of Goods Sold percentage of sales 3595 Inventory Purchase Information Purchases paid in current month Purchases paid in next month Purchases are al on credit Planned ending inventory as a percentage of next month's Cost of Goods Sold 7496 26% 12% Sales Commission Information Sales commissions as a percentage of sales Sales commissions are paid the month after they are incurred 755 Advertising Expense Information Variable Rate Fixed Cost 15 50% $80,000 12 $30,000 $50,000 13.00N Insurance policy Information # of months of insurance coverage paid for each year The policy period is from August 1 to July 31 each year The premium was paid on July 31, 2019 The premium will be charged to prepaid insurance 1 2 General and Administrative Expense Information 3 Fbed cost portion 4 Variable rate (as a percentage of sales) 5 Seling and administrative expenses are paid in the month incurred 6 37 Fixed Asset Information 38 Purchase Land on September 15, 2019 39 Current Depreciation expense per month 40 41 Long-Term Loan Interest Information 12 The interest rate on the long-term debt per month is 43 Interest is paid on the principle balance at the beginning of the month 44 Minimum Cash Balance 45 New borrowing must be in $1,000 increments 46 47 Tax Information 48 Income tax rate 49 are paid in the month after they are incu (expensed) 50 51 Dividend Information 52 Cash dividend declared on September 20, 2019 53 - Cash dividend paid on October 15, 2019 260.000 10.000 $25,000 25 $30.000 Policies and Plans used by The Bobcat Beverage Company, Inc., in budgeting 1. All Sales are on Credit. Sales are collected 29% in the month of sale and 71% in the month following sale. 2. Cost of goods sold is budgeted to be 35% of sales. 3. The Bobcat Beverage Company, Inc. plans to end each month with inventory levels equal to 12% of the next month's cost of sales. 4. The company pays for 74% of the purchases of merchandise in the month of the purchase and 26% in the following month. 5. The Bobcat Beverage Company, Inc. pays a sales commission of 7.5% on all sales. The selling commission is paid in the month after the salesmen earn the commission. 6. The company believes that advertising expense is a mixed cost. Based on an analysis of data from previous years, they determine that the best estimate of advertising expense is 15.5% of sales plus $80,000. T 7. The company pays all of its advertising expense in the month AFTER it is incurred. 8. The Bobcat Beverage Company, Inc. estimates its general and administrative expenses to be equal to 13% of budgeted sales plus $50,000. The general and administrative expenses are paid in the month in which they are incurred. 9. Depreciation is $10,000 per month on the property, plant and equipment owned on August 31, 2020 for the period of this budget. 10. On July 31, 2020, the company purchased and paid cash of $30,000 for a twelve- month policy covering the period August 1, 2020 to July 31, 2020 and recorded the cost in Prepaid Insurance. 11. On September 15, 2020, the company purchased Land for $260,000, paying cash. 12. The Bobcat Beverage Company, Inc. records interest expense and accrues interest payable at the rate of 1% per month (simple interest) based on the beginning balance of Long-Term Debt for that month. The Bobcat Beverage Company, Inc. will pay interest in the month it is incurred. 13. The Bobcat Beverage Company must maintain a minimum cash balance of $25,000. If it must borrow any funds, it must borrow in $1,000 increments. Any excess cash will be used to pay down long-term debt. The company may either borrow funds or repay funds, but not both in the same month. 14. The Bobcat Beverage Company, Inc. records income tax expense and accrues income tax payable monthly using a 25% estimated tax rate. Income taxes are paid in the month AFTER they are incurred. 15. The company will declare a cash dividend on September 20, 2020 for $30,000. The cash dividend will be paid on October 15, 2020. No other dividends were declared or paid
