The information given below is the Bengals Company's beginning balance sheet, estimates and policies, and the partially completed Master Budget for July and August. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets Bengals Company Balance Sheet As of June 30, 2020 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities $ 5,000 Accounts Payable $ 11.000 15,000 Commissions Payable 6,000 Income Taxes Payable 3.000 1,600 Dividends Payable 5.000 21,600 Total Current Liabilities 25,000 70,000 Property Plant & Equipment Land Equipment Accumulated Depreciation Net PP & E Total Assets 60,400 85.000 (22.000) 123,400 $ 145,000 Long-term debt Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & SE 40,000 10,000 50,000 $ 145,000 1. Expected sales are $50,000, 564,000, and $72,000, respectively in July, August, and September. All sales are on credit. 2. The company collects 60% of sales in the month of the sale and 35% in the month after the sale, and the remaining 5% are never collected (i.e., they are uncollectable accounts receivable). 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 70% of its purchases in the month of the purchase and 30% in the month after the purchase. 6. The company pays a 3% sales commission to its sales staff that is paid in the month after it is earned 7. The company also incurs a utilities expense that is equal to $300 plus 1% of sales. This expense is paid in the month it is incurred. 8. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $1,100 per month, Salaries $1,400 per month and Depreciation S900 per month. 9. On July.. the company purchased an insurance policy covering 24 months for $12,000. 10. The company pays interest on its long-term debt at the end of each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month. 11. On July.25. the company will invest $10,000 in the stock of another company. In addition, the company will pay cash for Land costing $6,500 on August 10. 12. On July.27. the company will pay a $5,000 cash dividend that is declared last May. 13. The Company is subject to a 25% income tax rate. The company Pays income taxes in the month after they are accrued expensed) 14. The company requires a minimum cash balance of $5,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments. Bengals Company Sales Budget S&A Expenses Budget July August September July August Credit Sales $ 50,000 $ 64,000 $72.000 Variable Selling & Admin Expenses Sales Commissions Utilities Bad Debts Total Variable SBA Expenses (4) 4.500 5,760 Cash Receipts: From Current Month Sales From Prior Month Sales Total Cash Receipts (1) $ 66,900 Inventory Purchases Budget Fixed Selling & Admin Expenses Uites Advertising Salari Depreciation Insurance Total Fixed SSA Expenses 1,100 1,400 900 1,100 1,400 900 July August September (5) 4,200 $ 35,200 $ 39,500 4,200 COGS Desired Ending Inventory Total Inventory Needed Beginning inventory inventory Purchases 121 $36,080 800 940 Cash Payments for SSA Expenses Sales Commissions Utilities Bad debts Advertising Salaries Depreciation Insurance Total Payments for $8A Expenses Cash Payments for Purchases For Current Month Purchases For Prior Month Purchases Total Cash Payments 1,100 1,400 16) 1,100 1,400 $ 34,068 (3) (7) 4,940 $ 21,300 S Cash Budget Income Statement July August July August $50,000 $ 64,000 Beginning Balance Cash Receipts Total Cash Available 55.900 50,000 Sales Less: Variable Costs COGS Variable 38A Expenses Contribution Margin Less Fixed Costs Fixed S8A Expenses Interest Expense Pretax income Less Income Taxes Cash Payments: For Inventory Purchases For S&A Expenses For Interest For Stock Investment For Land For Dividends For Taxes Total cash payments 34,058 $ 13,100 $ 17,840 3,275 4,460 $ 9,825 $ 13,380 Net Income 74,058 Surplus (Deficit) New Borrowing/Repayment) Ending Cash Balance (9) 30,000 10,989 (10) 5.000 $ 5,942 Balance Sheet July August July August $ (18) ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets (13) 17,500 (14) LIABILITIES & STOCKHOLDERS EQUITY Current Labilities Accounts Payable Commissions Payable Income Taxes Payable Dividends Payable Total Current Liabilities 9.882 (19) (20) (15) Long term debt (21) Property Plant & Equipment Stock Investment Land Equipment Accumulated Depreciation Total PP &E (16) 85.000 40,000 85,000 (17) Stockholders' Equity Common Stock Retained Earnings Total Stockholders Equity 40,000 (22) TO TAL ASSETS $ 174.482 $ 184,420 TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 174,482 $ 184,420 The information given below is the Bengals Company's beginning balance sheet, estimates and policies, and the partially completed Master Budget for July and August. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets Bengals Company Balance Sheet As of June 30, 2020 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities $ 5,000 Accounts Payable $ 11.000 15,000 Commissions Payable 6,000 Income Taxes Payable 3.000 1,600 Dividends Payable 5.000 21,600 Total Current Liabilities 25,000 70,000 Property Plant & Equipment Land Equipment Accumulated Depreciation Net PP & E Total Assets 60,400 85.000 (22.000) 123,400 $ 145,000 Long-term debt Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & SE 40,000 10,000 50,000 $ 145,000 1. Expected sales are $50,000, 564,000, and $72,000, respectively in July, August, and September. All sales are on credit. 2. The company collects 60% of sales in the month of the sale and 35% in the month after the sale, and the remaining 5% are never collected (i.e., they are uncollectable accounts receivable). 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 70% of its purchases in the month of the purchase and 30% in the month after the purchase. 6. The company pays a 3% sales commission to its sales staff that is paid in the month after it is earned 7. The company also incurs a utilities expense that is equal to $300 plus 1% of sales. This expense is paid in the month it is incurred. 8. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $1,100 per month, Salaries $1,400 per month and Depreciation S900 per month. 9. On July.. the company purchased an insurance policy covering 24 months for $12,000. 10. The company pays interest on its long-term debt at the end of each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month. 11. On July.25. the company will invest $10,000 in the stock of another company. In addition, the company will pay cash for Land costing $6,500 on August 10. 12. On July.27. the company will pay a $5,000 cash dividend that is declared last May. 13. The Company is subject to a 25% income tax rate. The company Pays income taxes in the month after they are accrued expensed) 14. The company requires a minimum cash balance of $5,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments. Bengals Company Sales Budget S&A Expenses Budget July August September July August Credit Sales $ 50,000 $ 64,000 $72.000 Variable Selling & Admin Expenses Sales Commissions Utilities Bad Debts Total Variable SBA Expenses (4) 4.500 5,760 Cash Receipts: From Current Month Sales From Prior Month Sales Total Cash Receipts (1) $ 66,900 Inventory Purchases Budget Fixed Selling & Admin Expenses Uites Advertising Salari Depreciation Insurance Total Fixed SSA Expenses 1,100 1,400 900 1,100 1,400 900 July August September (5) 4,200 $ 35,200 $ 39,500 4,200 COGS Desired Ending Inventory Total Inventory Needed Beginning inventory inventory Purchases 121 $36,080 800 940 Cash Payments for SSA Expenses Sales Commissions Utilities Bad debts Advertising Salaries Depreciation Insurance Total Payments for $8A Expenses Cash Payments for Purchases For Current Month Purchases For Prior Month Purchases Total Cash Payments 1,100 1,400 16) 1,100 1,400 $ 34,068 (3) (7) 4,940 $ 21,300 S Cash Budget Income Statement July August July August $50,000 $ 64,000 Beginning Balance Cash Receipts Total Cash Available 55.900 50,000 Sales Less: Variable Costs COGS Variable 38A Expenses Contribution Margin Less Fixed Costs Fixed S8A Expenses Interest Expense Pretax income Less Income Taxes Cash Payments: For Inventory Purchases For S&A Expenses For Interest For Stock Investment For Land For Dividends For Taxes Total cash payments 34,058 $ 13,100 $ 17,840 3,275 4,460 $ 9,825 $ 13,380 Net Income 74,058 Surplus (Deficit) New Borrowing/Repayment) Ending Cash Balance (9) 30,000 10,989 (10) 5.000 $ 5,942 Balance Sheet July August July August $ (18) ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets (13) 17,500 (14) LIABILITIES & STOCKHOLDERS EQUITY Current Labilities Accounts Payable Commissions Payable Income Taxes Payable Dividends Payable Total Current Liabilities 9.882 (19) (20) (15) Long term debt (21) Property Plant & Equipment Stock Investment Land Equipment Accumulated Depreciation Total PP &E (16) 85.000 40,000 85,000 (17) Stockholders' Equity Common Stock Retained Earnings Total Stockholders Equity 40,000 (22) TO TAL ASSETS $ 174.482 $ 184,420 TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 174,482 $ 184,420