wholesale distributor of consumer goods: Current assets as of March 31: Cash: $7,500 Accounts receivable: $20,000 Inventory: $39,600 Building and equipment, net: $127,200 Accounts payable:
wholesale distributor of consumer goods:
Current assets as of March 31:
Cash: $7,500
Accounts receivable: $20,000
Inventory: $39,600
Building and equipment, net: $127,200
Accounts payable: $23,550
Common stock: $150,000
Retained earnings: $20,750
a. The gross margin is 25% of sales
b. Actual and budgeted sales data:
March (actual): $50,000
April: $66,000
May: $71,000
June: $96,000
July: $47,000
c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.
d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold.
e. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.
f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,300 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $954 per month (included depreciation on new assets)
g. Equipment costing $1,500 will be purchased for cash in April
h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Required:
Using the preceding data:
- Complete the schedule of expected cash collections.
- Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.
- Complete the cash budget
- Produce an absorption costing income statement for the quarter ended June 30.
- Produce a balance sheet as of June 30.
Chrome File Edit View History Bookmarks People Tab Window Help 7 100% Wed Dec 9 8 44 14 PM Q ... Connect X + ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/... W ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work 4 Complete this question by entering your answers in the tabs below. 25 Required 1 Required 2 Required 3 Required 4 Required 5 points Prepare a balance sheet as of June 30. eBook Shilow Company Print Balance Sheet June 30 Assets Current assets: Cash $ 4,910 Accounts receivable 38,400 Inventory 28,200 Total current assets 71,510 Building and equipment-net 27,200 assets $ 198,710 Liabilities and Stockholders' Equity Accounts payable $ 21,300 Stockholders' equity: Mc raw Hill DEC O 9 OChrome File Edit View History Bookmarks People Tab Window Help 7 97% Wed Dec 9 8 52 08 PM Q ... Connect + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... * W ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work P Complete this question by entering your answers in the tabs below. 25 Required 1 Required 2 Required 3 Required 4 Required 5 points Prepare an absorption costing income statement for the quarter ended June 30. eBook Shilow Company Print Income Statement For the Quarter Ended June 30 Sales $ 233,000 Cost of goods sold: Beginning inventory 39.600 Purchases 163,350 Goods available for sale 202,950 Ending inventory 28,200 174,750 Gross margin 58,250 Selling and administrative expenses: Commissions 27,960 Rent 6,900 Depreciation 2,862 Other expenses Mc Hill DEC 9Chrome File Edit View History Bookmarks People Tab Window Help 7 97% Wed Dec 9 8 52 12 PM Q ... Connect + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... * W ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work P Complete this question by entering your answers in the tabs below. 25 Required 1 Required 2 Required 3 Required 4 Required 5 points Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.) eBook Shilow Company Print Cash Budget April May June Quarter Beginning cash balance $ 7,500 Add collections from customers 59,600 Total cash available 37,100 0 0 Less cash disbursements For inventory 49,800 For expenses 14,180 For equipment ,500 Total cash disbursements 65,480 0 0 Excess (deficiency) of cash 1,620 available over disbursements Financing: Borrowings Repayments Interest Mc DEC 9Chrome File Edit View History Bookmarks People Tab Window Help 7 97% Wed Dec 9 8:52:17 PM Q ... Connect + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... * W ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 Required 1 Required 2 Required 3 Required 4 Required 5 points Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. eBook Merchandise Purchases Budget Print April May June Quarter Budgeted cost of goods sold $ 49,500 $53,250 $ 72,000 $ 174,750 Add desired ending merchandise inventory 42,600 57,60 28,200 28,200 Total needs 92, 100 110,850 100,200 202,950 Less beginning merchandise inventory 39,600 42,600 57,600 39,600 Required purchases $ 52,500 $68,250 $ 42,600 163,350 Budgeted cost of goods sold for April = $66,000 sales x 75% = $49,500 Add desired ending inventory for April = $53,250 x 80% = $42,600 Schedule of Expected Cash Disbursements-Merchandise Purchases April May June Quarter March purchases $ 23,550 $ of $ $ 23,550 April purchases 26,250 26,250 52,500 May purchases 34, 125 34, 125 68.250 June purchases 0 0 21,300 21,300 Total disbursements $ 49,800 $60,375 $ 55,425 $ 165,600 Mc 4 of 4 Hill DEC 9Chrome File Edit View History Bookmarks People Tab Window Help 7 97% Wed Dec 9 8 52 20 PM Q ... Connect + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... * W ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work J. WVIIIPICLE LIKE LUSII WHYEL P 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30. 25 Complete this question by entering your answers in the tabs below. points Required 1 Required 2 Required 3 Required 4 Required 5 eBook Print Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Quarter Cash sales $ 39,600 $ 42,600 $ 57,600 $ 139,800 Credit sales 20,000 26,400 28,400 74,800 Total collections $ 59,600 $ 69,000 $ 86,000 214,600 Required 1 Required 2 > Mc Hill DEC 9
