Vaughan Company makes AMAZING SUPER DUPER Widgets. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in budget preparation: 1. Sales Budget The marketing department has estimated sales as follows for the remainder of the year: (Actual sales in June were 6,000 units) July August September 10,000 7,000 15,000 October November December 5,000 6,000 8,000 The selling price of a SUPER DUPER widget is $50 and all sales are on account. Based on past experience, sales are collected in the following pattern: 60% in the month of sale 32% in month following the sale 8% are never collected (uncollectible) 8. From here we go to the cash budget. We need to know cash receipts, cash disbursements, Cash flows/deficit, and the financing section. Vaughan's cash guidelines are as follows: They have a line of credit that can be accessed in $1,000 increments at an annual interest rate of 15%. Money will be borrowed on the last day of a given month and paid back on the last day of the month when it can be. Minimum cash balance required by Vaughan is $50,000. The beginning cash balance on July 1 is $50,000. Interest is paid when money is paid back. a Vaughan Company Cash Budget 3rd Quarter July August September Beginning Cash Balance Add: Cash Receipts Total Cash Available Less: Disbursements Direct Materials Direct Labor FOH S&A Expenses Total Disbursements Cash Balance (Deficit) Borrowings RePayments Interest Ending Cash Balance 9. From here we move on to the Budgeted Income Statement. Vaughan Company Budgeted Income Statement 3rd Quarter Total 3rd Quarter July August September Sales Less: CGS Gross Margin Less: S&A Expenses Net Operating Income (Loss) Less: Interest Expense Net Income Vaughan Company makes AMAZING SUPER DUPER Widgets. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in budget preparation: 1. Sales Budget The marketing department has estimated sales as follows for the remainder of the year: (Actual sales in June were 6,000 units) July August September 10,000 7,000 15,000 October November December 5,000 6,000 8,000 The selling price of a SUPER DUPER widget is $50 and all sales are on account. Based on past experience, sales are collected in the following pattern: 60% in the month of sale 32% in month following the sale 8% are never collected (uncollectible) 8. From here we go to the cash budget. We need to know cash receipts, cash disbursements, Cash flows/deficit, and the financing section. Vaughan's cash guidelines are as follows: They have a line of credit that can be accessed in $1,000 increments at an annual interest rate of 15%. Money will be borrowed on the last day of a given month and paid back on the last day of the month when it can be. Minimum cash balance required by Vaughan is $50,000. The beginning cash balance on July 1 is $50,000. Interest is paid when money is paid back. a Vaughan Company Cash Budget 3rd Quarter July August September Beginning Cash Balance Add: Cash Receipts Total Cash Available Less: Disbursements Direct Materials Direct Labor FOH S&A Expenses Total Disbursements Cash Balance (Deficit) Borrowings RePayments Interest Ending Cash Balance 9. From here we move on to the Budgeted Income Statement. Vaughan Company Budgeted Income Statement 3rd Quarter Total 3rd Quarter July August September Sales Less: CGS Gross Margin Less: S&A Expenses Net Operating Income (Loss) Less: Interest Expense Net Income