Req #4

Problem 8-31 Completing a Master Budget [LO8-2, L08-4, LOB-7, LOB-8, LO8-9, LOB-10) Hilyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter As of December 31 the end of the prior quarter, the company's general ledger showed the following account balances: Not receivable Eventory tuings and equipent net) Accounts payable Como tock Retained earning Det 57.000 313,600 50,00 167.000 S96.225 500.000 107.675 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March Apr 3267,000 $402.000 $599,000 $314,000 $210,000 c. Sales are 20% for cash and 80% on credit. Al 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. $32,000 per month advertising, $64,000 per month shipping, 5% of sales, other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter will be $44,820 for the quarter, 1. Each month's ending inventory should equal 25% of the following month's cost of goods sold. 9. One-half of a month's inventory purchases is paid for in the month of purchase, the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,700 cash. During March, other equipment will be purchased for cash at a cost of $78,500 1. During January, the company will declare and pay $45.000 in cash dividends. 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 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Check my work moder This 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 $1000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Required: Using the data above, complete the following statements and schedules for the first quarter 1. Schedule of expected cash collections 2-0Merchandise 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 Answer is not complete Complete this question by entering your answers in the tabs below. Reet Red 2A Reg 28 Red Red Prepare an absorption conting income statement for the water ending March 31 Millyarl Company Income For the Quarter Ended March 31 Sales $ 1315.000 Cost of goods sold Purchase 700.000 . 780.000 780.000 OO Being inventory Gross margin Selling and administrave esponse Other expense ol (44.020) (203,200) 149.020) 7.00 2140 85.540 Interest expense Net income lolo