Use the information above to fill in the blanks for the cash budget in number 6. the $39,620 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 2) 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 April May June Quarter ASTOZ,000 192,000 82000 36000 Ubbo | 131,200 16.400 147,600 102,000 265,200 40,800 UOS 000 1142.000 369.200 $11,200 82,000 $2,000 346.560 S68100 514,000 1,466,460 0 Collections on Sales: Cash sales February credit sales: March credit sales: April credit sales: May credit sales: June credit sales: Total cash collections Next, the president suggests the company tighten the inventory level requirements such that ending in levels for April, May, and June would be only 15% of the cost of merchandise to be sold in the lo 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. June Quarter Garden Sales, Inc. Cash Budget For the Quarter Ended June 30 April May Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchases for inventory Selling & Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance 39,620 7) If the company can meet the president's new assumptions, bow 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. 8) Complete the following steps to complete the Budgeted Balance Sheet for June 30 below. a) Cash should equal the ending cash balance from the Revised Cash Budget. untereivable balance in one of two ways; one - use a T-account and the illes and collection information from 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 2) 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 April May June Quarter ASTOZ,000 192,000 82000 36000 Ubbo | 131,200 16.400 147,600 102,000 265,200 40,800 UOS 000 1142.000 369.200 $11,200 82,000 $2,000 346.560 S68100 514,000 1,466,460 0 Collections on Sales: Cash sales February credit sales: March credit sales: April credit sales: May credit sales: June credit sales: Total cash collections Next, the president suggests the company tighten the inventory level requirements such that ending in levels for April, May, and June would be only 15% of the cost of merchandise to be sold in the lo 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. June Quarter Garden Sales, Inc. Cash Budget For the Quarter Ended June 30 April May Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchases for inventory Selling & Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance 39,620 7) If the company can meet the president's new assumptions, bow 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. 8) Complete the following steps to complete the Budgeted Balance Sheet for June 30 below. a) Cash should equal the ending cash balance from the Revised Cash Budget. untereivable balance in one of two ways; one - use a T-account and the illes and collection information from