Selling and administrative expense disbursements for the quarter April May June Quarter Salaries $8,550 $8,550 $8,550 $25,650 promotions $4,250 $4,250 $4,250 $12,750 Remaining $5,080 $6.000 $6, 160 $17,240 expenses Total adm and $17,880 $18,800 $18,960 $55,640 sales expenses disbursements Depreciation is a non-cash expense and therefore does not require disbursement in any of the months, so it is not recorded.JKL Corporation Financial and Operational Data JKL Corporation is engaged in the buy-sell business and is designing its master budget for the next quarter of operations from April to June 20xx. The data collected and required to work with such a budget are as follows: A. Certain data from the Balance Sheet as of March 31, 20xx: Dr. Cr. Cash $20,000 Accounts receivable $64,000 Inventory $15,400 Buildings and equipment (net of depreciation) $225,000 Accounts payable $23,400 Long-term debt $90,000 Common stock - capital $150,000 - Retained earnings $61,000 Totals $324.400 $324,400 A. Expected (projected) and actual sales for various months of 20xx are: march (actual) $80,000 April $63,500 may $75,000 June $77,000 July $58,000 B. Other important data: 1- Monthly sales are 20% cash and 80% credit. Credit sales from the previous month are collected in full in the following month (therefore, what is in accounts receivable at the end of March is 80% of March sales). 2- The gross profit margin generated by the corporation on its sales is 33%. 3- Each month's ending inventory is equal to 25% of the next month's budgeted cost of sales. 4- 40% of monthly merchandise purchases are paid in the month of purchase and the remainder in the month following the purchase. 5- Expected monthly expenses are: salaries, $8,550; advertising, $4,250 per month; and remaining expenses (except depreciation) represent 8% of sales. Assume that these expenses are paid every month (nothing is due at the end of the month). 6- Depreciation expense is $10,000 for the quarter and includes the portion that corresponds to assets acquired during the period. 7- Equipment was purchased in cash: $26,000 in April and $15,000 in May 20xx. 8- Management wants to maintain a minimum cash balance at the end of each month of $8,000. 9-When the company has a need for cash, it can borrow from a local bank in $1,000 increments at the beginning of each month up to a borrowing ceiling of $20,000. The interest rate the bank charges on these loans is 1% per month and the interest is paid the next monthCash Budget April May June Total Beginning cash balance $ 20,000 $ 13,537 $ 8,478 $ 20,000 Cash Receipts $ 76,700 $ 65,800 $75,400 $ 217,900 Cash on hand (A) $ 96,700 S 79,337 $83,878 $ 237,900 Less disbursements: Purchases $ 39,283 $ 44,059 $49,714 $ 133,056 Selling and adminitsrative expenses $ 17,880 S 18,800 $ 18,960 $ 55,640 Purchase of equipment $ 26,000 $ 15,000 $ 41,000 Dividends $ 2,900 $ 2,900 Total Disbursements (B) $ 83,163 $ 77,859 $71,574 $ 232,596 Excess(deficiency)cash (C = A-B) S 13,537 5 1,478 $ 12,304 $ 5,304 Financing: Loan $ 7,000 $ 7,000 Loan payments S Interest ($7,000*1%) $ -70 5 -70 Financing S $ 7,000 S -70 $ 6,930 Ending cash balance S 13,537 $ 8,478 $ 12,234 $ 12,234June 20XX Calculation Financial rates current ratio 2- Acid-test ratio 3- accounts receivable turn-over 4- average collection period 5- inventory turn-over 6- average sales period 7- Debt/ Assets 8- debt-equity ratio 9- timesinterest earned ratio 10-gross margin percentage 1 1-Net margin 12-ROI: return on investment(we presume that it is not compound interest and that each loan is made at the end of the month). The company paid dividends of $2,900 in June Sales collections for the quarter April May June debtors 64,000 Quarter 0 collection begins 64.000 Todo colectado April sales 12,700 50,800 0 63,500 63,500 * 20%: 63500 * May sales 0 15,000 60,000 80% June sales 0 75,000 0 15,400 15 400 75000 * 20%; 75,00 Sales 76,700 65,800 75,400 collections 217,900 * 80% 77000 *20% April May June Quarter Sales 63,500 75,000 77,000 58,000 (a) Cost of sales % 67% 67% 67% 67% (b) 1-33% = 1-0.33 = 0.67 = 07% Cost of sales $ 42,545 50.250 51,590 38,860 (a) * (b) quarterly purchases April May June Quarter Cost of sales $42,545 $50,250 $51.590 $38.860 desired ending $12,563 $12,868 $9,715 $9,715 Each month * 25% inventory Total material $55, 108 $63,148 $61,305 $48,575 needed Beginning -$15,400 -$12,563 -$12,898 -$15,400 inventory Materials to be $39,708 $50,585 $48,408 $33,175 purchased Purchase disbursements for the quarter April May June Quarter Start of $23,400 23,400 payments to suppliers $15,883 $23,825 0 $39.708 April purchases total * 40% ; total * 60% paid $30,351 $50,585 May purchases 0 $20,234 Jatal * 40% ; total * 60%% paid $19.363 $19,363 48,408 - 40% June purchases 0 paid $133,056 $39,283 $49,714 Purchase $44,059 disbursements