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PART 1 Fall Is Coming Inc. is a merchandising company that rakes, leaf blowers and other outdoor home supplies. The company is planning its cash

PART 1 Fall Is Coming Inc. is a merchandising company that rakes, leaf blowers and other outdoor home supplies. The company is planning its cash needs for the third quarter. In the past, Fall Is Coming Inc. has had to borrow money during the third quarter to support peak sales of Fall maintenance products, which occur during August. The following information has been assembled to assist you, the newly hired managerial accountant, in preparing the required budget documents (found under "required" below). a. Budgeted monthly absorption costing income statements for July to October are as follows: Sales Cost of goods sold Gross margin Selling and administrative expenses: July 140,000 84,000 56,000 $ August 170,000 102,000 68,000 September 150,000 90,000 60,000 October 145,000 87,000 58,000 Selling expense Administrative expense* Total selling and administrative expenses Net operating income 25,200 19,600 44,800 28,900 25,200 25,500 18,000 23,200 20,300 54,100 43,500 43,500 S 11,200 $ 13,900 16,500 14,500 *Includes $2,000 depreciation each month. b. Sales are 20% for cash and 80% on credit. c. Credit sales are collected over a three-month period, with 10% collected in the month of sale, 70% in the month following sale, and 20% in the second month following sale. May sales totalled $90,000, and June sales totalled $96,000. 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% are paid in the following month. Accounts payable for inventory purchases at June 30 total $31,200. . The company maintains its ending inventory levels at 75% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $48,000. f. Land costing $6,500 will be purchased in July. . Dividends of $6,000 will be declared and paid in September. h. The cash balance on June 30 is $18,000; the company must maintain a cash balance of at least this amount at the end of each month. .. The company has an agreement with a local bank that allows it to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $100,000. The interest rate on these loans is 2% 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. [5:53 p.m., 3/15/2023] Jashan: 1. A schedule of expected cash collections for July, August and September and for the quarter in total. 2. A merchandise purchases budget for July, August and September. 3. A schedule of expected cash disbursements for merchandise purchases for July, August and September and for the quarter in total. 4. A cash budget for July, August, and September and for the quarter total.

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