Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Bag Corporation is a distributor of high-end golf bags. In the past, The Bag Corporation produced and sold the golf bags. Over time, they

The Bag Corporation is a distributor of high-end golf bags. In the past, The Bag Corporation produced and sold the golf bags. Over time, they realized it was cheaper to buy the golf bags fully assembled and resell them to the public, therefore eliminating their need for a manufacturing plant. The Bag Corporation pays $80 per golf bag and sells them for $200.

Prepare a 2024 (January December) Revenue Budget (for units and sales dollars) for The Bag Corporation. They anticipate selling 6,000 golf bags in January 2024 and increasing that number by 1% each month.

Prepare a 2024 Purchases Budget (for units and cost) for The Bag Corporation. They plan to have 5,000 golf bags on hand at December 31, 2023. The Bag Corporation purchases golf bags once a month and bases their purchase on 95% of the next months projected sales. (In December 2023, The Bag Corporation plans to sell 5,500 golf bags and will purchase 5,700 golf bags [January 2024 projected sales of 6,000 golf bags x 95%]. In January 2024, The Bag Corporation plans to sell 6,000 golf bags and will purchase 5,757 golf bags [February 2024 projected sales of 6,060 golf bags x 95%]).

Prepare a 2024 Cash Collections Budget for The Bag Corporation. 70% of The Bag Corporation sales are cash sales and 30% are credit sales. The credit sales are collected the following month.

Prepare a 2024 Operating Expenses Budget for The Bag Corporation. Administrative Expenses are $300,000 per month and are fixed. Marketing Expenses are 4% of the current months sales. Storage/Distribution Expenses are $6 per golf bag sold in each month.

Prepare a 2024 Cash Disbursements Budget for The Bag Corporation. The Bag Corporation pays for the golf bags on credit but must make full payment within 30 days. All Administrative, Marketing and Storage/Distribution expenses are paid in the current month.

Prepare a Budgeted Income Statement for the year ended December 31, 2024.

1. Partial golf bags cannot be purchased or sold; therefore, you should round up and use whole numbers for all budget calculations. 2. Spreadsheet software must be used. Calculations must be done using the spreadsheet software using formulas. Do not plug in numbers. 3. You must include a total column for all 12 months for each budget.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions