Vaughan Company Sales Budget 3rd Quarter Total 3rd Quarter July August September Sales in Units Selling Price per Unit Total Sales in $ 10,000 50 500,000 7,000 50 350,000 15,000 50 750,000 32,000 50 1,600,000 Cash Collections June's Cash Collections July's Cash Collections August's Cash Collections September's Cash Collections Total Cash Collections 96,000 30,000 160,000 210,000 112,000 450,000 $ 396,000$ 370,000 $ 562,000 $ 96,000 460,000 322,000 450,000 13,280,000 2. Production Budget The company maintains a finished goods inventory equal to 20% of the following month's sales. The inventory of finished goods on July 1 is as it should be. Vaughan Company Production Budget 3rd Quarter Total 3rd Quarter July August September Budgeted Sales in Units Add: Desired Ending Inventory Total Needs Less: Beginning Inventory Required Production 10,000 1,400 11,400 2,000 9,400 7,000 3,000 10,000 1,400 8,600 15,000 1,000 16,000 3,000 13,000 32,000 5,400 37,400 6,400 31,000 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 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 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) 10. 1 I And last but not least, we have the budgeted Balance Sheet! We need to know what our balance sheet looked like on July 1, so here goes: I 1 I I I I I 1 I 1 1 1 Vaughan Company Balance Sheet 7/1/Year 2021 1 I I 1 Liabilities & SE: A/P (given) $ 1 22,848 1 Assets: Cash (given) A/R (given) ! RM Inventory (14,100 * $0.70) | FG Inventory (2,000 * 28.70) I 1 $ 50,000 96,000 9,870 57,400 19,000 260,000 (60,000) $ 432,270 1 I I | Land 200,000 | Building&Equipment Less A/D Total Assets Common Stock Retained Earnings Total Liab & SE: $ 209,422 ! 432,270 1 1 1 1 1 1 1 I Vaughan Company Budgeted Balance Sheet 9/30/Year 2021 1 1 1 1 Assets: I Cash Liabilities & SE: A/P 1 1 1 T I 1 I 1 A/R RM Inventory ! FG Inventory | Land Building&Equipment Less A/D !Total Assets 1 I Common Stock Retained Earnings Total Liab & SE: 1 ---- Vaughan Company Sales Budget 3rd Quarter Total 3rd Quarter July August September Sales in Units Selling Price per Unit Total Sales in $ 10,000 50 500,000 7,000 50 350,000 15,000 50 750,000 32,000 50 1,600,000 Cash Collections June's Cash Collections July's Cash Collections August's Cash Collections September's Cash Collections Total Cash Collections 96,000 30,000 160,000 210,000 112,000 450,000 $ 396,000$ 370,000 $ 562,000 $ 96,000 460,000 322,000 450,000 13,280,000 2. Production Budget The company maintains a finished goods inventory equal to 20% of the following month's sales. The inventory of finished goods on July 1 is as it should be. Vaughan Company Production Budget 3rd Quarter Total 3rd Quarter July August September Budgeted Sales in Units Add: Desired Ending Inventory Total Needs Less: Beginning Inventory Required Production 10,000 1,400 11,400 2,000 9,400 7,000 3,000 10,000 1,400 8,600 15,000 1,000 16,000 3,000 13,000 32,000 5,400 37,400 6,400 31,000 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 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 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) 10. 1 I And last but not least, we have the budgeted Balance Sheet! We need to know what our balance sheet looked like on July 1, so here goes: I 1 I I I I I 1 I 1 1 1 Vaughan Company Balance Sheet 7/1/Year 2021 1 I I 1 Liabilities & SE: A/P (given) $ 1 22,848 1 Assets: Cash (given) A/R (given) ! RM Inventory (14,100 * $0.70) | FG Inventory (2,000 * 28.70) I 1 $ 50,000 96,000 9,870 57,400 19,000 260,000 (60,000) $ 432,270 1 I I | Land 200,000 | Building&Equipment Less A/D Total Assets Common Stock Retained Earnings Total Liab & SE: $ 209,422 ! 432,270 1 1 1 1 1 1 1 I Vaughan Company Budgeted Balance Sheet 9/30/Year 2021 1 1 1 1 Assets: I Cash Liabilities & SE: A/P 1 1 1 T I 1 I 1 A/R RM Inventory ! FG Inventory | Land Building&Equipment Less A/D !Total Assets 1 I Common Stock Retained Earnings Total Liab & SE: 1