Use the information above to fill in the blanks for number 11 and complete the blanks in the direct materials budget. The $29,902 is given and is correct.

a. Budgeted monthly absorption costing income statements for April-July are: April May June July $ 510,000 $ 710,000 $ 410,000 $ 310,000 357,000 497,000 287,000 217,000 153,000 213,000 123,000 93,000 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expense Administrative expense* Total selling and administrative expenses Net operating income 71,000 91,000 40,500 53,600 111,500 144,600 $ 41,500 $ 68,400 52,000 32,600 84,600 38,400 $ 31,000 29,000 60,000 33,000 $ *Includes $13,000 of depreciation each month. non Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. Schedule of Expected Cash Collections April May June $ 102,000 $ 142,000 $ 82,000 Quarter Cash sales $ 326,000 Sales on account: February 11,600 131,200 11,600 147,600 March 16,400 April 40,800 326,400 40,800 408,000 May 56,800 454,400 32,800 511,200 32,800 June Total cash collections $ 285,600 $ 541,600 $ 610,000 $ 1,437,200 Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June. Merchandise Purchases Budget April May June Budgeted cost of goods sold $ 357,000 $ 497,000 $ 287,000 Add: Desired ending merchandise inventory 99,400 57,400 43,400 Total needs 456,400 554,400 330,400 Less: Beginning merchandise inventory 71,400 99,400 57,400 Required inventory purchases $ 385,000 $ 455,000 $ 273,000 Prepare the following for merchandise inventory, a schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. Quarter $ 93,100 Schedule of Expected Cash Disbursements for Merchandise Purchases April May June Beginning accounts payable $ 93,100 April purchases 192,500 192,500 May purchases 227,500 227,500 June purchases 136,500 Total cash disbursements $ 285,600 $ 420,000 $ 364,000 385,000 455,000 136,500 1,069,600 $ Garden Sales, Inc. Cash Budget For the Quarter Ended June 30 April $ 43,000 $ 285,600 328,600 June Quarter May 40,500 $ Beginning cash balance Add collections from customers Total cash available 541,600 40,500 $ 610,000 650,500 43,000 1,437,200 1,480,200 582, 100 Less cash disbursements: 285,600 71,000 420,000 91,000 364,000 52.000 1,069,600 214,000 27,500 40,600 19,600 87,700 29,000 21,000 Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayment 29,000 21,000 1,421,300 58,900 435,600 405,100 (76,500) 580,600 1,500 214,900 117,000 39,000 156,000 (156,000) (4,290) Interest (156,000) (4,290) (160,290) 54,610 39,000 (4.290) Total financing Ending cash balance 117,000 40,500 $ $ 40,500 $ $ 54,610 been made but payment is expected in the future. What would the accounts receivable c) Include the "total asset amount in the "total liability & SH Equity box. Include the accounts payable amount from CONNECT and calculate the amount of retained earnings such that the Remember the accounts receivable as of March 31? b) Complete the asset side of the balance sheet including total assets. balance sheet will balance. $43.000 193,00 Cash Accounts Receivable Inventory Total current assets Plant Assets, net Total Assets Garden Sales, Inc Balance Sheet March 31 Accounts Payable 3159,200 71.400 Common Stock 273, bou Retained Earnings 350,000 Total SH Equity 100,000 430,500 530,500 $623,600 Total liabilities & SH Equity $62,60 ompany's president is concerned about its ability to borrow money on its line of credit. The bank Hicated they will reduce the total loan balance limit to $100,000. Because of this, the president o know how increased collection efforts and reduced inventory levels will impact the cash budget. non hond 80% on credit However credit sales 326.000 Using the president's revised assumptions, complete the revised cash collection schedule below. Because these changes will take effect April 1, all previous months' sales will be collected in accordance with the old policies. (Same as on CONNET) Revised Cash Collection Schedule Collections on Sales: April May June Quarter Cash sales IN TOZ,000 T42,000 82,000 February credit sales: 11,600 11,660 March credit sales: 131,200 16.400 147,600 102,000 1265,200 40,500 April credit sales: yos nou 142,000 1369,200 511, 200 May credit sales: 82.000 $2,000 June credit sales: 346800 565,603 514,000 1,466,4001 Total cash collections Doyt the president suggests the company tighten the inventory level requirements such that ending mou and June would be only 15% of the cost of merchandise to be sold in the ble at March 31 remains unchanged from 3) Using the president's new assumptions regarding inventory levels, complete the revised Inventory Purchasing Budget. Revised Inventory Purchasing Budget April May June July Budgeted cost of goods sold $351,000 497,000 1287,000 120,000 Add desired ending Inventory 74,550 43,050 32550 Total needs MUSSO 1540, 050 319.550 Less beginning merchandise inventory [11,400 79,550 43.050 Required inventory purchases 1360 156 465,500 216,500 2 4) The company has been postponing payments to supplier for quite some time such that the president does not believe they can change their payment policies. (Percentages used in CONNECT will not change). The president is hoping the reduced inventory amounts will be enough to conserve cash. Using the same payment policy from CONNECT, complete the Revised Cash Disbursements Schedule below. Revised Cash Disbursements for Inventory April May June Quarter Beginning accounts payable 93.100 193.10 April purchases 180,015 18.075 1360,150 May purchases 1232,750 232.750 1465,500 June purchases 138,250 1138,250 Total cash disbursements for Inventory (273,175 285 371,000 1,057,000 5) The president does, however, believe that can deferred 20% of their selling and administrative cash ngyable at the disbursements for Inventory 158.25 (273,175 412,8 311,000 1,057,000 5) The president does, however, believe that can deferred 20% of their selling and administrative cash costs into the month following the expense. This would create an increase to accounts payable at the end of each month equal to 20% of the current month's selling and administrative cash expenses (without depreciation). Complete the table below for the Cash Disbursements for Selling and Administrative expenses. Quarter 151.600 Cash Disbursements for Selling & Administrative Expenses April May June Beginning accounts payable -0- April expenses 119, 100 May expenses 105. 280 26,50 June expenses Total cash disbursements 178,800 for S & A expenses 124,980 B 1287,380 (111,500-13,000):8778,800 (111,500-13,000): 2 = 19,700 C84,600-13,000), 8257,280 3 6) Using all the information from the tables above, complete the revised cash budget below. S7,000 620 11,057,000 Garden Sales, Inc. Cash Budget For the Quarter Ended June 30 Her April May June Quarter Beginning cash balance 43.100 10825 Add collections from customers 346,800 SODO 11,48. You Total cash available 389.80 606128 1,529200 Less cash disbursements: Purchases for inventory [273,175 1412,825 57.000 Selling & Administrative expenses 178,700 1121,990 83.600 281350 21,000 Land purchases 129,000 Dividends paid Z1000 12,000 1372,975 Sbb, SOS Ulldo 139433 Total cash disbursements Excess (deficiency) of cash available 16,825 139,620 1160,020 /135,020 over disbursements Financing: 124 DOO TL 000 Borrowings 125,000 125,000 Repayments i 140 TUJ Interest 24.000 L000 (2510) (1905 Total financing 10,825 10,620 134,280 134,250. 25,000 Ending cash balance 7) If the company can meet the president's new assumptions, how will it affect the cash budget? Will the company be able to keep its borrowing below the new limit? Explain in 30 to 50 words. Payable balance. Post the purchases from the Revised Purchases Budget and the incurrence of the Selling & Administrative cash expenses (Remember not to include depreciation). Post the cash payments from the respective schedules and determine the ending balance. Or two - use the percentages for the payment policies (payments to suppliers from CONNECT and payment for S&A expenses from #5) and determine the amounts that would be unpaid as of June 30. f) Include any Loan Payable amount (principal and interest) that would be unpaid at the end of the quarter, June 30. Note - This may be zero. g) Update the Retained Earnings amount using a T-account with the beginning balance from the balance sheet for March 31. Increase Retained Earnings for the budgeted Net Income (from CONNECT) and decrease it for the dividend amount paid during the period. h) Your balance sheet should balance. Total Assets = "Total Liabilities and SH Equity" 350000 -15,000.3) 729,00 2.40.000 counter sales the 430,500-21,000+ 41,500468400 +38,400 740 2557060 Cash Accounts Receivable 202,800 Garden Sales, Inc Balance Sheet June 30 DR4,280 Accounts Payable 152,570 Loan Payable (if necessary) 32,550 Total Liabilities 152,570 469,630 Common Stock 100.000 Retained Earnings 1557,060 340,000 Total SH Equity 651,060 809,630 Total liabilities & SH Equity 809.630 10,000-246,000) Inventory C710,000-653,209 Total current assets = 302800 Plant Assets, net Total Assets 9) The production manager confides to the president that estimating ending inventories in the budget is sometimes difficult and he is concerned about the impact of reduced inventory levels on the company's ability to meet sales. He explains that the sale manager sometimes adjusts the sales numbers before passing them on. When questioned by the president, the sales manager admits that she doesn't want the company to fall short of its sales projections, so she generally gives a little bit of "breathing room" by lowering the initial sales projection anywhere from 5% to 10%. Should the president be concerned about the budgetary slack being used by the sales manager? Explain in 30 to 50 words. d) Complete the table below for the Production Budget for the quarter. Finished Goods Inventory dollars, how many units will they expect to sell in July? Sub -5,167 b) Beginning Finished Goods Inventory: Remember ending inventory should be 20% of next month's sales. How many units will be in ending inventory for March using the budgeted unit c) Ending Finished Goods Inventory: Using the budgeted unit sales for July, how many units will 11) The production process for Garden Sales requires 3 board feet of wood and 0.8 pounds of metal per unit. Garden Sales typically maintains raw material inventory level of 20% of next month's production requirement. Use this information to prepare the Direct Materials Budget for wood and metal. Remember, ending finished goods inventory must equal 20% of next month's sales the quarter. This will be the beginning inventory for April and Include this number in the Budget below. sales for April? 1 700 should be included in the budget below. ? 1033 be in June's ending inventory? 60 60 60 Budgeted Sales in $s Average price per unit Budgeted unit sales Production Budget April May June Quarter ES0000 710,000 T110.000 150.000 60 8500 6823 | 27167 2,367 11,367 11,033 1,033 12867 128,200 12,367 1.367 11,700 9,167 10,833 16,500 Zbrou 570,000/60 1,700 Desired units of ending Total needs Less: Units of beginning Finished Goods Inventory Required production in units (11.83302 110,867 requirements. Beginning Wood Inventory: For wood, based on April production levels, how many board feet of wood will the company have in their April beginning raw material in inventory? b) Ending Wood Inventory: Assume Garden Sales wants to end the quarter with 4,800 board feet of wood in their raw material inventory. (This will be your ending inventory number for June). 6 867 Required production in units 11) The production process for Garden Sales requires 3 board feet of wood and 0.8 pounds of metal per unit. Garden Sales typically maintains raw material inventory level of 20% of next month's production requirement. Use this information to prepare the Direct Materials Budget for wood and metal. Remember, ending finished goods inventory must equal 20% of next month's sales requirements. a) Beginning Wood Inventory: For wood, based on April production levels, how many board feet of wood will the company have in their April beginning raw material in inventory? b) Ending Wood Inventory: Assume Garden Sales wants to end the quarter with 4,800 board feet of wood in their raw material inventory. (This will be your ending inventory number for June). 6 Complete the Direct Materials Budget for wood below. Report board feet in whole numbers (round up). Assume Garden Sales can purchase Wood for $0.20 a board foot. Direct Materials Budget - Wood April May June Quarter X 3 x 3 x3 X3 4.800 4.800 Required production in units x 3 board feet per unit Board feet of wood needed to meet production. Add: Desired ending raw materials inventory - wood. Total board feet of wood raw materials needed Less: Beginning raw materials inventory Board feet of wood raw materials to be purchased 129902 0.20 0.20 0.20 0.20 Cost per board foot Wood purchases in dollars for Wood Purchases: Assume the same payment patterns as used from your connect Calculate the payments necessary for wood purchases for the Cumah 31 accounts payable balance relates