Please help with: Salesbudget/Cashcollections/Purchasebudget/Cashdisbursements/Variableoperatingexpenses/Operatingexpensebudget/Cashbudget/incomestatement/Balancesheet/Fifocalculation.

INFORMATION: HEDRON, INC. ANNUAL BUDGET: _{No Formula = No Credit}

>Hedron, Inc. is a company that re-sells one product, a particularly comfortable lawn chair. An overseas contractor makes the product exclusively for Hedron, so Hedron has no manufacturing-related costs.

>As of 11/01/2019, each lawn chair costs Hedron $4 per unit. Hedron sells each chair for $10 per unit.

>The estimated sales (in units) are as follows:

Nov 2019	11,250
Dec 2019	11,600
Jan. 2020	10,000
Feb. 2020	11,400
Mar. 2020	12,000
Apr. 2020	15,600
May 2020	18,000
June 2020	22,000
July 2020	18,000

>Per an existing contract, the cost of each chair is scheduled to increase by 5% on March 1, 2020. In addition, because of increasing costs of plastic webbing, the cost is anticipated to increase by an additional 5% on May 1, 2020. To offset these increases, the company plans to raise the sales price to $11.25 per unit beginning May 1, 2020. The sales forecast (i.e., estimated sales in units) takes this price increase into account.

>Thirty percent of any months sales are for cash, and the remaining 70% are on credit. Thirty percent of the credit sales are collected in the month of sale, 50% are collected in the following month, and 16% are collected in the second month after the sale. The remaining receivables are deemed uncollectible. Bad debts are written off in the month the debt is deemed uncollectible (e.g. if the sale is made in January and is not collected by the end of March, it is written off in March.) No accrual for estimated bad debts is made in the month of sale.

>The firms policy regarding inventory is to stock (i.e. have in ending inventory) 40% of the forecasted demand in units (i.e., estimated sales) for the next month. Hedron uses the first-in, first-out (FIFO) method in accounting for inventories.

>Forty percent of the inventory purchases are paid for in the month of purchase and the remaining 60% are paid in the following month (i.e. all the previous months Accounts Payable are paid off by the end of any month.)

>Per a prior contract, a cash payment of $50,000 for equipment previously purchased is due in January. Another payment of $30,000 is due in February. Depreciation on the equipment previously purchased is included in the overhead cost detailed in item 11 below. Also, dividends of $12,000 are to be paid in March.

>Monthly operating expenses consist of the following (if these are cash expenses, they are paid when incurred):

Salaries and Wages	$3,000
Sales Commissions	7% of sales revenue
Rent	$8,000
Other Variable Cash Expenses	6% of sales revenue
Supplies Expense: See note (1)	$2,000
Other: See note (2)	$48,000

Note: 1. Hedron maintains, on hand, one months worth of supplies.

2. Other general and administrative overhead is expected to be $48,000 per month.

Of this amount, $24,000 represents depreciation and other non-cash expenses

>The company must maintain a minimum cash balance of $15,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. Ignore interest on the loan in your calculations, but minimize the amount borrowed and pay off any loans as soon as possible.

>Cash on hand as of December 31, 2019 is expected to be $15,000. In addition, there will be no notes payable as of this date.

11. 1.1111.111.1 See below the other Balance Sheet accounts with their balances as of December 31, 2019:
    • Supplies..............................................$ 2,000
    • Property, Plant and Equipment.......... 970,000
    • Accumulated Depreciation................. 526,475
    • Common Stock................................... 200,000
    • Retained Earnings.............................. 322,811

Additional Information: Hedron Inc.

Cash Receipts Budget

Total Cash Receipts, January: $104,200

Total Cash Receipts, Jan June: $842,847

Uncollectible, January: $ 3,150

Uncollectible, Jan June: $ 20,118

Purchase Budget

Total Purchases, Jan June: $391,200

Cash Budget

Total Cash Disbursements, Jan June: $799,726

Ending Cash Balance, June: $ 58,121

Budgeted Income Statement

Operating Expenses, Total: $508,318

Net Income, Total: $ 56,234

Budgeted Balance Sheet

Total Assets: $621,023

4 Hedron Inc. Sales Budget For the 6 mos ending June 20 Nov 19 Dec 19 Jan 20 11250 11600 10,000 10.00 $10.00 10.00 112.500S 116.000 $100.000 Feb 20 Mar20 Apr 20 May 20 June 20 6 mos total 11,400 12,000 15.600 18.000 22,000 111.850 10.00 $ 10.00 10.00 $1125 1125 114,000 $ 12,000 $156.000$ 202.500 247,500 $ 168.500 $ 3030 7 8 Budged unit les 9 Selling price per un 10 Total Sales 11 12 Cash Sales 13 Credit Sales 14 15 Cash Sales 16 Credit Sales 17 Total Sales 18 19 20 Current month AIR Collections 21 1 month prior AIR Collections 22 2 months prior A/R Collections 23 Uncollectible $ $ 33,750 $ 78,750 112 500 $ 34,800 $ 81200 116.000$ 30,000 70,000 100.000 34.2008 79,800 114,000 $ 36,000 84.000 120,000 $ 46,800 $ 109.200 156.000 6 60.750 $ 74,250 $ 141750 173,250 202,500 $ 247500 S 350.550 817 950 1.168.500 $ 30 50% 1654 Hedron, Inc. Cash Collections For the mosending June 20 Jan 20 30,000 21.000 35,000 Feb 20 34,200 23.940 39.900 12.768 110,808 MM 20 36,000 25,200 42.000 137440 116,640 $ Apd 20 May 20 June 20 6mos total 46.800 60.750 74.250 350.550 32,760 42525 51975$ 245,385 54,600 70.875 86,625 $ 408,975 17.472 22.680127.7200 $ 130.872 151.6323 196,830 240.570 $ 1135,782 11200 37,200 30. Current month oash Sales 31 Current month AIR Collections 32 month prior A/R Collections 33 2 months prior AIR Collections 34 Total cash collections 35 36 Bad Debt Expense 37 38 Desired ending inventory 39 Budget 2.800 13132 3.360 4368 5.670 6.930 32718 40% FIFO Calculation 40 Hedron, Inc Purchase Budget For the mos ending June 20 Mar20 42 43 44 45 Budged unt sales 46 Add desired ending inventory 47 Total needs 48 Less Beginning inventory 49 Required Purchases 50 51 Cost per un 52 Purchase Nov 19 11250 4,640 15.990 12.000 Dec 19 11,600 4,000 15,800 4,640 10,960 Jan 20 10,000 4,560 14,560 4,000 10,560 Feb 20 11.400 4,800 16.200 4,560 11,640 6,240 18,240 4,800 13440 Apr 20 15,600 7200 22.800 6240 May 20 19.000 8,800 26,800 7,200 19,600 June 20 22.000 7.200 29 200 8.800 20.400 6 mos total 111,850 47,440 159,290 40,240 103,160 $ 4.41 $ 4.000 43.840 $ 4.00 $ 42.240 4.00 46,5608 4.20 $ 56.448$ 4.41 89.964 $ 69,5525 435,040 26 304 54 Paid in Month of Purchase 40% 55 Paid in Month after Purchase 60% 56 57 58 Hedron, The 59 Schedule of Budgeted Cash Disbursements for Merchandise Purchases 60 For the mosending June 20 61 62 Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6mos total 63 Cash purchases $ 16.896 18,6245 22.5795 27821 345745 35,989S 156.480 64 1 month prior A/P Collections 25344 27336 33,869 41731 51862207,046 65 Cash disbursements for merchandise purch. $ 43200 50,5155 61630$ 76,305$ 878483 363,526 68 67 68 Variable Operating Expenses 69 Sales Commissions of Revenue 70 Other Variable Cash Expenses of Revenue 71 Fired Operating espentes 72 Salaries and Vages 73 Rent 74 Supplies Eupense 75 Other - Overhead 78 Other : Depreciation Budaet FIFO Calculation Hedron, Inc. Operating Expense Budget For the 6 mos ending June 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6 mos total 79 79 80 81 82 Jan 20 83 Salaries and Wages 84 Sales Commissions 85 Rent 86 Other Variable Cash Expenses 87 Supplies Expense 88 Other - Overhead 89 Other - Depreciation 90 Bad Debt Expense 91 Total operating expenses 92 Depreciation and noncash items 93 Bad Debt Expense 94 Cash disbursements for operating expenses 95 96 Equipment payment - January 97 Equipment payment. February 98 Dividends - March 99 Minimum Monthly Cash Budget 100 101 102 103 104 105 Jan 20 106 Cash balance, beginning 107 Add collections from customers 108 Total cash available 109 Less disbursements: Cash disbursements for merchandise purch. 111 Cash disbursements for operating expenses 112 Equipment purchases 113 Dividends 114 Total cash disbursements Budget FIFO Calculation Hedron, Inc. Cash Budget For the 6 mos ending June 20 Feb 20 Mar20 Apr '20 May 20 June 120 6 mos total 110 + D E G H Hedron, Inc. Budgeted Income Statement For the 6 mos ending June 20 Feb 20 Mar 20 Apr 20 May 20 June 20 Total A B 115 Excess of receipts over disbursements 116 Financing 117 Borrowing-note 118 Repayments-note 119 Total Financing 120 Cash balance, ending 121 122 123 124 125 126 127 Jan 20 128 Sales.net 129 Cost of goods sold: 130 Gross margin 131 Total operating expenses 132 Net Income 133 134 Hedron, Inc. 135 Budgeted Balance Sheet 136 6/30/2020 137 138 Assets 139 Current Assets 140 Cash 141 Accounts receivable 142 Supplies 143 Merchandise Inventory 144 Plant and Equipment: 145 Buildings and Equipment 146 Accumulated Depreciation 147 Total assets 148 149 Liabilities and Equity 150 Accounts payable 151 Capital stook 152 Retained earnings Budget FIFO Calculation E F G D Hedron, Inc. Budgeted Income Statement For the mos ending June 20 Feb 20 Mar 20 Apr 20 May 20 June 20 Total B 123 124 125 126 127 Jan 20 128 Sales, net 129 Cost of goods sold: 130 Gross margin 131 Total operating expenses 132 Net Income 133 134 Hedron, Inc. 135 Budgeted Balance Sheet 136 6/30/2020 137 138 Assets 139 Current Assets: 140 Cash 141 Accounts receivable 142 Supplies 143 Merchandise Inventory 144 Plant and Equipment: 145 Buildings and Equipment 146 Acoumulated Depreciation 147 Total assets 148 149 Liabilities and Equity 150 Accounts payable 151 Capital stock 152 Retained earnings 153 Total liabilities and equity A B D E F G H 1 2 FIFO Calculation 4 5 6 Beg Inventory Beg Inventory Units Purchases Units COGS - Units Ending Inventory Ending Inventory - Units Purchases COGS Jan Feb Mar Apr May Jun 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Rudant FIFO Calculation