Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:The production manager of Rordan Corporation has submitted the following

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:
Each unit requires 0.75 direct labor-hours, and direct laborers are paid $14.00 per hour.
Requlred:
Prepare the company's direct labor budget for the upcoming fiscal year. (Round "Dlrect labor tlme per unlt (hours)" onswers to 2
decimal places.)
a. The gross margin is 25% of sales.
b. Actual and budgeted sales data:
c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March
31 are a result of March credit sales.
d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold.
e. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The
accounts payable at March 31 are the result of March purchases of inventory.
f. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,300 per month; other expenses (excluding depreciation),6%
of sales. Assume that these expenses are paid monthly. Depreciation is $909 per month (includes depreciation on new assets).
g. Equipment costing $2,500 will be purchased for cash in April.
h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an
agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a
total loan balance of $20,000. The interest rate on these loans is 1% 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.
Requlred:
Using the preceding data:
Complete the schedule of expected cash collections.
2 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.
Complete the cash budget.
Prepare an absorption costing income statement for the quarter ended June 30.
Prepare a balance sheet as of June 30.
Complete this question by entering your answers in the tabs below.
Complete the schedule of expected cash collections.
image text in transcribed

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

Research Methods For Accounting And Finance Global Management Series

Authors: Audrey Paterson, Kevin D. Ogorman, David Leung, Robert Macintosh, William Jackson

1st Edition

1910158895, 978-1910158890

More Books

Students also viewed these Accounting questions