The following data relate to the operations of Medice Company, a wholesale distributor of consumer good As of March 3 USD: 15.00 Arts payable 14.00 Accounts receivable 21.00 Capital stock 41,000 10,000 R edrawings 102,06 Buildings and equipment) 140,000 Assumptions a) Gross margin is of sales b) Actual and budgeted sales data: USD March (actual) April 70.000 82,000 June 25.000 July 70.000 c) Sales are for cash and on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are the result of March credit salles. Break down between Cash & Credit sales is as follow Cash Sale Credit Sales 35% Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. 25% of a month's inventory purchases are paid for in the month of purchase the remainder is paid for in the following month. The accounts payable at March 31 are a result of March purchases of inventory Monthly expenses are as follows salaries and was, 12.500 methren, 1.600 month other expenses (excluding depreciation, 8% of sales Assume that these expenses are paid monthly. Depreciation is $1.000 month (includes depreciation wasses) ) Equipment costing 59,000 will be purchased for cash in April h) The company mas maintain a minimum cash balance of 55.000, Aspeline of credit is available at a local bank. All borrowing is done at the beginning of a month and all repayments are made at the end of a month borrowing must be in multiples of $1,000. The annual interest rate is 10%. Interest is paid only at the time of payment of principal: figure interest on whole months (1/12.212, and so forth). Required using the above data: 1) Prepare Schedule of Expected Cash Collections (5 points) May USD Cash sales Credit sales Total collections April 53,300 28.700 82,000 June 40950 48.750 220500 63.000 75.000 Quarter - Total 143,000 77,000 2 20,000 2) Prepare Merchandise Purchases Budget (8 Points) Budgeted cost of goods sold April 82.000 12.600 15.000 Total needs Less beginning inventory Required purchases June 75.000 14 150 89,350 4750 40.600 Quarter. Total 220,000 41.950 261,950 143,000 | ,950) 51100 40.950 37,050 3) Prepare Schedule of Expected Cash Disbursements-Merchandise Purchases (4 points) April May June Quarter - Total March purchases Aprill purchases 20.500 15.750 61.500 36,250 0.250 1.750 47.250 Total disbursements 20.500 77,250 66,000 163.750 The following data relate to the operations of Medice Company, a wholesale distributor of consumer good As of March 3 USD: 15.00 Arts payable 14.00 Accounts receivable 21.00 Capital stock 41,000 10,000 R edrawings 102,06 Buildings and equipment) 140,000 Assumptions a) Gross margin is of sales b) Actual and budgeted sales data: USD March (actual) April 70.000 82,000 June 25.000 July 70.000 c) Sales are for cash and on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are the result of March credit salles. Break down between Cash & Credit sales is as follow Cash Sale Credit Sales 35% Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. 25% of a month's inventory purchases are paid for in the month of purchase the remainder is paid for in the following month. The accounts payable at March 31 are a result of March purchases of inventory Monthly expenses are as follows salaries and was, 12.500 methren, 1.600 month other expenses (excluding depreciation, 8% of sales Assume that these expenses are paid monthly. Depreciation is $1.000 month (includes depreciation wasses) ) Equipment costing 59,000 will be purchased for cash in April h) The company mas maintain a minimum cash balance of 55.000, Aspeline of credit is available at a local bank. All borrowing is done at the beginning of a month and all repayments are made at the end of a month borrowing must be in multiples of $1,000. The annual interest rate is 10%. Interest is paid only at the time of payment of principal: figure interest on whole months (1/12.212, and so forth). Required using the above data: 1) Prepare Schedule of Expected Cash Collections (5 points) May USD Cash sales Credit sales Total collections April 53,300 28.700 82,000 June 40950 48.750 220500 63.000 75.000 Quarter - Total 143,000 77,000 2 20,000 2) Prepare Merchandise Purchases Budget (8 Points) Budgeted cost of goods sold April 82.000 12.600 15.000 Total needs Less beginning inventory Required purchases June 75.000 14 150 89,350 4750 40.600 Quarter. Total 220,000 41.950 261,950 143,000 | ,950) 51100 40.950 37,050 3) Prepare Schedule of Expected Cash Disbursements-Merchandise Purchases (4 points) April May June Quarter - Total March purchases Aprill purchases 20.500 15.750 61.500 36,250 0.250 1.750 47.250 Total disbursements 20.500 77,250 66,000 163.750
