"We really need to get this new material handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short term loan down at MetroBank This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm's top management Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The Tim's main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal's General Manager of Marketing, has recently completed a sales forecast. She believes the company's sales during the first quarter of 20xt wil increase by 10 percent each month over the previous month's sales. Then Wilcox expects sales to remain constant for several months. Intercoastal's projected balance sheet as of December 31, 20x0, is as follows: Part 1 of 9 055 points Print Accounts receivable Marketable securities Inventory Huildings and equipment (et of accumulated depreciation Total anst Accounts payable Bond Internt payable Property taxes Tayable Bonde payable 61 due in 2016) Common stock Retained earnings Total Ilahilities and stockholders' equity . 50,000 224,000 20,000 154,000 667.000 $1,115,000 $ 205,800 9.000 2.400 360,000 450,000 2100 $1,115,000 Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated 1. Projected sales for December of 20x0 are $400,000 Credit sales typically are 70 percent of total sales Intercoastal's credit experience indicates that 20 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month. 2. Intercoastal's cost of goods sold generally runs at 70 percent of sales, Inventory is purchased on account, and 30 1 2. Intercoastal's cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 30 percent of each month's purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month's projected cost of goods sold. 3. Hanson has estimated that intercoastal's other monthly expenses will be as follows: 1 of 9 Salou salaries Advertising and promotion Administrative salaries Depreciation Interest on bonde Property taxe $20.000 16,000 28,000 20,000 1.600 600 dok In addition, sales commissions run at the rate of 2 percent of sales 4. Intercoastal's president, Davies-Lowry, has indicated that the firm should invest $120,000 in an automated Inventory. handling system to control the movement of inventory in the firm's warehouse just after the new year begins. These equipment purchases will be financed primarily from the firm's cash and marketable securities. However, Davies-Lowry believes that intercoastal needs to keep a minimum cash balance of $20,000. If necessary, the remainder of the equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson belleves short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $30,000 on the last day of each quarter 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. Saved 2 MUILLE. TUOREISTELE, VOVIES LUWIyos ULICU I SHUU Noun wye ve Yuan possible. 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $30,000 on the last day of each quarter 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period. 2 of 9 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements ook -int 2. Cash receipts budget: 20x1 January February $ 132.000 $ 145,200 $ March First Quarter 159.720 S 436,920 Cosh sales Cash collections from credit sales made during current month Cash collections from credit sales made during preceding month Total cash receipts $ 132,000 $ 145,200 $ 159,720 S 436,920 etv A 6 Part 3 of 9 from a local bank. The minimum period for such a loan is Hanson belleves short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter it possible. 5. Intercoastal's board of directors has indicated an intention to declare and pay dividends of $30,000 on the last day of each quarter 6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on intercoastal's bonds is paid semiannually on January 31 and July 31 for the preceding six-month period. 7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period 0.55 points book Required: Prepare intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements Print 3. Purchases budget 20x0 December 20x1 January February March est Quarter Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less Expected beginning inventory Purchases raw 6 stv A o -X ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchurl=https%253A%252F%252Fconnect.mheducation.com%252Fconnect HuskyCT M Gmail M McGraw-Hill Conn. Hello Molly Dresses Website for ACC CFNCE Bond Price Apps Problem 9.44 Saved Help 4 4. Cash disbursements budget. (Round your inventory purchases up to the nearest whole dollar.) Part 4 of 9 20x1 January February March First Quarter 0.55 points eBook Print Inventory purchases: Cash payments for purchases during the current month Cash payments for purchases during the preceding month Total cash payments for inventory purchases Other expenses: Sales salaries Advertising and promotion Administrative salaries Interest on bonds Property taxes Sales commissions Total cash payments for other expenses Total cash disbursements ezto.mheducation.com/ext/map/index.html?_con=con&external browser=0&launchuriahttps%253A%252F%252Fconnect.mheducation.com%252F HuskyCT M Gmail M McGraw-Hill Conn... Hello Molly Dresses Website for ACCT. CENCE Bond Price ps Problem 9-44 Saved 5 Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the following schedules and statements. Part 5 of 9 5. Complete the first three lines of the summary cash budget. Then do the analysis of short-term financing needs in requirement 6. Then finish requirement 5. 0.55 points 20x1 January February March First Quarter Book Print Cash receipts (from part 2) Less: Cash disbursements (from part 4) Change in cash balance during period due to operations Sale of marketable securities (1/2x1) Proceeds from bank loan (1/2x1) Purchase of equipment Repayment of bank loan (3/31/1) Interest on bank loan Payment of dividends Change in cash balance during first quarter Cash balance, 1/1/X1 Cash balance, 3/31/X1 Mc Sraw Hill 1 6 otv A Problem 9.44 Saved 6 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completi schedules and statements. Part 6 of 9 6. Calculation of required short-term borrowing 0.55 points eBook Print Projected cash balance as of December 31, 20x0 Less: Minimum cash balance Cash available for equipment purchases Projected proceeds from sale of marketable securities Cash available Less: Cost of investment in equipment Required short-term borrowing ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchurl=https%253A%252F%252Fconnect.mhedu HuskyCT M Gmail M McGraw-Hill Conn. Hello Molly Dresses Website for ACC... CENCE Bond Price Problem 9.446 Saved 7 Prepare Intercoastal Electronics Company's master budget for the first quarter of 20x1 by completing the fo schedules and statements. Part 7 of 9 7. Prepare Intercoastal Electronics' budgeted income statement for the first quarter of 20x1. (Ignore income taxes. 0.55 points INTERCOASTAL ELECTRONICS COMPANY Budgeted Income Statement For the First Quarter of 20x1 eBook Print Selling and administrative expenses Total selling and administrative expenses MC Graw Hill Saved Problem 9-44 *** 8 Required: Prepare Intercoastal Electronics Company's master budget for the first quarter schedules and statements. Part 8 of 9 8. Prepare Intercoastal Electronics' budgeted statement of retained earnings for the fi 0.55 points eBook INTERCOASTAL ELECTRONICS COMPANY Budgeted Statement of Retained Earnings For the First Quarter of 20x1 Retained earnings, 12/31/x0 Print Retained earnings, 3/31/X1 HuskyCT M Gmail M McGraw-Hill Conn nchuriant 253A%252F%252Fconnect.mheducation.com/252Fconnect Website for ACCT... FNCE Bond Price Hello Molly Dresses Problem 9.446 Saved Help 9 schedules and statements 9. Prepare Intercoastal Electronics' budgeted balance sheet as of March 31, 20x1. (Hint On March 31, 20x1, Bond Interest Payable is $3,600 and Property Taxes Payable is $600.) (Round your answers to the nearest whole dollar.) Part 9 of 9 0.6 points INTERCOASTAL ELECTRONICS COMPANY Budgeted Balance Sheet March 31, 20x1 eBook Print Total assets Total liabilities and stockholders' equity