Question
PROBLEM 7-8 reparing a CHECK FIGURES (2) May purchases $64,800 (4) May 31 cash balance: $4,590 Following is selected information relating to the
PROBLEM 7-8\ reparing a\ CHECK FIGURES\ (2) May purchases
$64,800
\ (4) May 31 cash balance:
$4,590
\ Following is selected information relating to the operations of Shilow Company, a wholesale distributor:\ Current assets as of March 31:\ Cash\ Accounts recelvable\ Inventory\ Plant and equipment, net\ Plant and equipment, net\ Accounts payable\ 21,750\ Capital shares\ 150.000\ 12,250\ Retained earnings\ a. Gross margin is
25%
of sales.\ b. Actual and budgeted sales data are as follows:\ March (actual)\
$50,000
\ April\ 60,000\ May\ 72,000\ May\ 90,000\ June\ 48,000\ July\ c. Sales are
60%
for cash and
40%
on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.\ d. At the end of each month, inventory is to be on hand equal to
80%
of the following month's sales needs, stated at cost of inventory. Depreciation is
$900
per month (includes depreciation on new assets).\ g. Equipment costing
$1,500
will be purchased for cash in April. and so forth).\ Required:\ Using the preceding data:\ Prepare a schedule of expected cash collections.\ Prepare a schedule of inventory purchases and a schedule of expected cash disbursements for purchases.\ Prepare a schedule of expected cash disbursements for operating expenses.\ Prepare a cash budget by month and for the quarter in total.\ Prepare an income statement for the quarter ended June 30. (Use the functional format in preparing your income statement, as shown in Schedule 9.)\ Prepare a balance sheet as of June 30 .
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