Question 01: Colerain Corporation is a merchandising company that is preparing a budget for the third quarter of the calendar year. The company's balance sheet as of June 30 is shown below COLERAIN CORPORATION Belance Sheet Labities and Shareholders' Equity Colerain's managers have made the following additional assumptions and estimates Q. Estimated sales for July August September, and October will be $200,000, $240,000 $260,000, and $220,000, respectively b. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 40% in the month of sale and 60% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Cach month's ending inventory must equal 30% of the cost of nee month's sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable on June will be paid in July d. Monthly selling and administrative expenses are always $67,000 amount is depreciation expeme and the remaining $60,000 relates to expenses that are paid in e The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common shares or repurchase its own shares during the quarter ended September 30 1. Prepare a schedule of expected cash collections for July August, and September. Al compute total cash collections for the quarter ended September 30, 4 Marks 2. Prepare a merchandise purchases budget for My, August, and September. Also compute total merchandise purchases for the quarter ended September 30. Marks 3. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Aho compute total cash disbursements for merchandise purchases for the quarter ended September 30th. 4 Marks) 4. Prepare an income Matement for the quarter ended September 30.4 Marks] 5. Prepare a balance sheet as of September 2014 Marks Question 01: Colerain Corporation is a merchandising company that is preparing a budget for the third quarter of the calendar year. The company's balance sheet as of June 30 is shown below COLERAIN CORPORATION Belance Sheet Labities and Shareholders' Equity Colerain's managers have made the following additional assumptions and estimates Q. Estimated sales for July August September, and October will be $200,000, $240,000 $260,000, and $220,000, respectively b. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 40% in the month of sale and 60% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Cach month's ending inventory must equal 30% of the cost of nee month's sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable on June will be paid in July d. Monthly selling and administrative expenses are always $67,000 amount is depreciation expeme and the remaining $60,000 relates to expenses that are paid in e The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common shares or repurchase its own shares during the quarter ended September 30 1. Prepare a schedule of expected cash collections for July August, and September. Al compute total cash collections for the quarter ended September 30, 4 Marks 2. Prepare a merchandise purchases budget for My, August, and September. Also compute total merchandise purchases for the quarter ended September 30. Marks 3. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Aho compute total cash disbursements for merchandise purchases for the quarter ended September 30th. 4 Marks) 4. Prepare an income Matement for the quarter ended September 30.4 Marks] 5. Prepare a balance sheet as of September 2014 Marks
