Prueba #3 Parte B

Problem 1 - Sales Budget and Cash Receipts Schedule:

The Game Zone sells computer and other electronic games. The store has budgeted sales for January 2015 as indicated in the following table. The company expects a 4 percent increase in sales for the month of February and March. The company normally collects 100 percent of its accounts receivable in the month following the sale and it had $50,000 of accounts receivable at January 1.

Sales Budget
Projected Sales	January	February	March
Cash Sales	40,000
Sales on Account	80,000
Total Budgeted Sales
Schedule of Cash Receipts
Current Months Cash Sales
Previous Month's A/R
Total Budgeted Cash Collections
Required: (a) Complete the sales budget and schedule of cash receipts by filling in the missing amounts. (b) What is the amount of sales revenue the company will report on its pro forma income statement for the first quarter (c) What are the total budgeted cash receipts for the first quarter. (b) Determine the amount of accounts receivable report on the first quarter pro forma balance sheet.

Problem 2. Purchases Budget and Schedule of Inventory Payments:

Sound Effects Audio Systems sells and installs car stereo systems. Managers need to prepare an inventory purchases budget for the first quarter of 2015. The company's sales budget for the first quarter is provided below:

	January	February	March
Budgeted sales	$200,000	$196,000	$180,000

Based on past experience the company expects the cost of goods sold to equal 80% of sales. Furthermore, the ending inventory balance each month should be 20% of the current period's cost of goods sold.

The company makes all purchases on account and pays 60% of accounts payable in the month of purchase and the remaining 40% in the next month. Accounts payable stood at $36,000 at December 31, 2014.

Inventory Purchases Budget
	January	February	March
PROJECTED PURCHASES
Budgeted Cost of Goods Sold
Plus Desired Ending Inventory
Total Inventory Needed
Less Beginning Inventory
Required Inventory Purchases
Schedule OF Cash Payments for Inventory Purchases
Current Purchases
Prior Month's Purchases
Total Budgeted Inventory Payments
Required: (a) Complete the inventory purchases budget and Schedule of cash payments for the quarter. (b) What is the amount of cost of goods sold the company will report on its pro forma income statement for the first quarter (c) What are the budgeted inventory payments for the quarter? (d) Determine the amount of ending inventory and the accounts payable balance that will appear on the pro forma balance sheet.

Problem 3. Selling and Administrative Expenses:

Virginia Jackson is opening Jackson Realty on January 2. For several weeks she has been busy putting together an operating budget for the first quarter of operation for her new business. All selling and administrative costs are paid when incurred except utilities, marketing expenses, and sales commissions. These items are paid in the month following the month incurred. Virginia has estimated her selling and administrative (S&A) costs as follows:

	January	February	March
Depreciation	$1,000	$1,000	$1,000
Marketing expense	2,000	1,400	1,000
Miscellaneous costs	500	400	400
Rent expense	5,000	5,000	5,000
Sales expense	4,000	8,000	8,000
Sales commissions	1,000	1,200	1,400
Utilities expenses	1,000	800	1,000
Total S& A cost before interest	$14,500	$17,800	$17,800

SCHEDULE OF Cash Payments for S&A Expenses
	January	February	March
Depreciation
Marketing expenses
Miscellaneous costs
Rent expense
Salary expense
Sales commissions
Utilities expense
Total Payments for S&A Expenses

Required: a) Prepare a schedule of cash payments for selling and administrative expenses for January

through March. b) What liabilities, in what amounts, would be reported on the pro forma balance sheet?

c) What amount of accumulated depreciation would be reported on the pro forma balance sheet?

Problem 4. Cash Budget

A management accountant was working on a cash budget for Oklahoma Company when he accidentally spilled his coffee. Some of the liquid splattered on his working papers rendering a few of the amounts illegible. The company desires a cash cushion of $7,500 to start each month. In any month in which there is cash shortage the company's bank will extend it a loan equal to the shortage amount. The loan is assumed to have been made on the last day of the month. Any time the company has a cash surplus it must repay as much of any outstanding loans as possible. The bank charges monthly interest of 1% on any outstanding loan balance.

Cash Budget
	Jan	Feb	Mar
Cash Receipts
Beginning Cash Balance	7,500	?	?
Add Cash Receipts	?	187,500	255,000
Total Cash Available	262,500	?	?
Cash Payments
For Inventory Purchases	127,500	112,500	118,500
For S&A Expenses	75,000	67,500	69,000
For purchase assets	37,500	37,500	37,500
Total Budgeted Payments	?	?	?
Financing Activities
Surplus (Shortage)	?	?	?
Borrowing (Repayment)	?	?	?
Ending Cash Balance	?	?	?

Required: Fill in the blanks