T Question 2 Heyard Company, an office supplies specialty store prepares i master budget on a quarterly basis. The following deta have been assembled to assist in preparing the master budget for the first Quarter 3. As of December 31 the end of the prior quarten the company's general ledger showed the following account balances aceable Inventory Building and lett) Accounts able TOCK Retained earnings 211,000 10.00 347.000 1,235 so0,000 10101 5 97.000 3 90,900 b. Actual sales for December and budgeted sales for the next four months are as follows December (actual January Tervery March April 5267,000 5.400,000 399.00 5314, $210.000 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, 564,000 per month shipping, 5% of sales, other expenses. 3% of sales Depreciation, including depreciation on new assets acquired during the quarter will be 544 B20 for the quarter Each month's ending Inventory should equal 25% of the following month's cost of goods sold g. One half of a month's inventory purchases is paid for in the month of purchase, the other has 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 canh 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 I 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: 2-6. 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required 3 Required 4 Required 5 Complete the Schedule of expected cash collections: Schedule of Expected Cash Collections January February March Quarter Cash sales $ 80 400 $80 400 Credit sales 213.600 213.600 Total collections $294.000 5 05 0 5 294.000 Required 24 ) Complete this question by entering your answers in the tabs below. Required Required 1 Required 2A Required 28 Required 4 Required 5 March Complete the merchandise purchases budget Merchandise Purchases Budget January February Budgeted cost of goods sold 241.200 5 359.400 Add desired ending Inventory 89.8501 Total needs 331,050 359.400 alma 60 300 0 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required Required 4 Required 5 Complete the merchandise purchases budget: Quarter Merchandise Purchases Budget January February March Budgeted cost of goods sold 241,200 $ 359,400 Add desired ending inventory 89.8507 Total needs 331,050 359 400 Less beginning inventory 60,300 Required purchases $ 270.750 $ 359.400 $ "$402.000 sales 60% cost ratio $241.200 15359 400 - 25% - $89,850 0 0 05 0 00 T Question 2 Heyard Company, an office supplies specialty store prepares i master budget on a quarterly basis. The following deta have been assembled to assist in preparing the master budget for the first Quartet As of December 31 the end of the prior quanten, the company's general ledger showed the following account balances accevable Inventory Buildings and equipment Accounts able COR Retained ning 32,000 21.00 60.00 34.000 3,225 so, 101.675 57.100 39.00 b. Actual sales for December and budgeted sales for the next four months are as follows December (actual) January February March April $267.000 5.400,000 599,00 5314,000 $210.000 c Sales are 20% for cash and 80% on credit. A 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 40of 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, 564,000 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 Each month's ending Inventory should equal 25% of the following month's cost of goods sold g. One half of a month's inventory purchases is paid for in the month of purchase the other has paid in the following month h. During February, the company wil purchase a new copy machine for $2.700 cash. During March, other equipment will be purchased for cash at a cost of $78.500 . During January, the company will decare and pay $45.000 in cash dividends. Management wants to maintain a minimum cash balance of 530,000. 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 IX 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 28 Required Required Required 5 Prepare a balance sheet as of March 31. Hilyard Company Balance Sheet March 31 Assets Current assets Total current assets $ 0 Total assets Liabilities and Stockholders' Equity Current liabile Stockholders' equilty 0 Total liabilities and stockholders' equity $