Problem 8-31 Completing a Master Budget [L08-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10) Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have be assembled to assist in preparing the master budget for the first quarter ok a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances int rences Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 56,000 212, 800 60,150 366,000 $ 89,925 500,000 105,025 694,950 $694,950 b. Actual sales for December and budgeted sales for the next four months are as follows Decenber (actual) January February March April 5266,000 401,000 598,000 $313,000 5209,000 b. Actual sales for December and budgeted sales for the next four months are as follows December (actual) January February Narch April 266,000 $401,000 $598,000 $313,000 209,000 int erces Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales d. The company's gross margin is 40% of sales. (in other words, cost of goods sold is 60% of sales) e Monthly expenses are budgeted as follows: salaries and wages, $31,000 per month advertising $65000 per month: shipping 5% of sales other expenses, 3% of sales. Depreciation ncluding depreciation on new assets acquired during the quarter, wil be $44,660 for the quarter t Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other haif is paid in the following month h. During February, the company will purchase a new copy machine for $2,600 cash. During March, other equipment will be purchased for cash at a cost of $78,000 L During January, the company will declare and pay $45,000 in cash dividends J Management wants to maintain a minimum cash balance of $30,000. 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. The interest rate on these loans is 15 per month and for simplicity we will assume that interest is not compounded. The company would, as far as i is able, repay the loan plus accumulated interest at the end of the quarter Required Using the dato above, complete the following statements and schedules for the first quarter Required: Using the data above, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31 Book Print ferences Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 equired 3 Required 4 Required 5 Complete the Schedule of expected cash collections Schedule of Expected Cash Collections January February March Quarter S 80,200 Cash sales 62.600$142,800 533,600 Total collections 293,000 320,800 S 62.600 676.400 Credit sales 212,800 320,800 Required 2A 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers In the tabs below. Required 1 Required 2ARequired 28 Required 3 Required 4 Required Book Complete the merchandise purchases budget Print Merchandise Purchases Budget January March Quarter Budgeted cost of goods sold Add desired ending inventory Total needs Less beginning inventory Required purchases "S40 1,000 sales x 60% cost rato-$240,600. 240,600 358,800S 187.800 31,350 9405.750 219.150 89,700146,950 31,350 31,350 60,150 270,150 $ 405,750 172.200 (28,800) 0.300 06,70 219,10 31360 60,150 46,950 $358,800-25%-$89,700. Required 1 Required 28 5. Prepare a balance sheet as of March 31 Complete this question by entering your answers in the tabs below. ts Required 1 Required 2A RequiredB Required 3 Required 4 Required eBook Complete the schedule of expected cash disbursements for merchandise purchases. Print Schedule of Expected Cash Disbursements for January February March Quarter $ 89,925 $ 89,925 270,150 January purchases February purchases March purchases Total cash disbursements for purchases 35,075135,075 0 S 225,000$135,075 0 360,075 Required 2A Required 3 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Hillyard Company Cash Budget January February March nts Quarter eBook Print References Beginning cash balance Add cash collections 56,000 293,000 349,000 Total cash available ntLess cash disbursements: Inventory purchases Selling and administrative expenses Equipment purchases Cash dividends 225,000 128,080 45,000 98,080 (49,080) Total cash disbursements Excess (deficiency) of cash Financing Repayments Total financing Ending cash balance $(49,080) C Required 28 Required4 5 Prepare a balance sheet as of March 31 Hillyard Company Balance Sheet March 31 Assets 10 points Current assels: eBook Print References Total current assets Total assets 0 Liabilities and Stockholders' Equity Current liabilities Stockholders' equity Total liabilities and stockholders' equity