Semester Case - Cowboy Ice Cream, Inc. Assuring the expansion of CIC takes place. W. 1. is trying to prepare a sales budget for the year following expansion Currently he's woning on data for the wholesale division. Using the Information compiled above, complete the following. Assume that soting and administrative expenses are 15% of sales revenue. During the first six months of the year, the price charged averaged $7.75 per unit Round all computations to the nearest whole dolor First Quarter Second Quarter Total Sales Revenue Cost of Goods Sold Gross Profit Selling and Admin Expenses Net Income Frank, W.L.'s fellow shareholder, told W.1. he expects sales next year after the proposed expansion) to be 20 percent greater than the current year Required Prepare a pro forma income statement including quarterly budgets for the first six months of next year, using Frank's estimate. First Quarter Second Quarter Total Sales Revenue Cost of Goods Sold Gross Profit Selling and Admin Expenses Net Income vboy Ice Cream, Inc. Asche considers expanding by adding a feed locallon, W., terelizes that budgeting property to inventory is more important than ever. As you know trom prior work, the wholesale division of Cic began January with 1.250 units of the following transactions related to inventory for the wholesale division inventory at a cost of $4.00 per unit. During the first six months of the current year. CIC recorded Sales (units) Month Beginning inventory January February March April . June Totals 1.500 1,600 1.750 3.100 4,500 48.00 17.250 Purchases Units Price Ea 1.250 $4.00 1.000 $4.50 1.200 $4.60 1.700 $4.40 2.900 $4.75 5,000 $4.85 4.500 $4.90 17.550 Total $5.000 $4,500 $5.520 $7.480 $13,775 $24,250 $2.050 $82,575 Relative to June, the company projects a 3 percent increase in cost of goods sold during July The desired ending inventory balance for July is $2,500. CIC pays cash to settle 60 percent of its purchases on account during the month of purchase and pays the remaining 40 percent in the month following the purchase. The accounts payable balance as of June 30 was $8,820 a. What is ending inventory, in dollars and units. at June 302 CIC applies the FIFO Cost flow assumption On June 30, the ending inventory is 300 units valued at $ 1,4 70 b. What is costs of goods sold in total and for each of the six months anding on Month Cost of Goods Sold January 6,125 7285 February March 7770 April 14, 620 21,815 May June 23,490 $81, 105 Total c. Determine the amount of purchases budgeted for July. 23 yao 24.194.70 501033 $25,224.70 2500-1970 d. Determine the amount of cash payments budgeted for inventory purchases in July 25224.7 $23,954.82 15, 134.82 79826 2
