Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

XYZ Merchandising Company is preparing its master budget for year 20X2. please consider the balance sheet below prepared for the year 20X1. Sales for the

image text in transcribed
XYZ Merchandising Company is preparing its master budget for year 20X2. please consider the balance sheet below prepared for the year 20X1. Sales for the first quarter of 20X2 are expected to be SI20.000 and sales are expected to increase each quarter by 10% through quarter four of 20X2. Sales for the first quarter of 20X3 are expected to be SI 50.000. All sales arc initially on credit. Credit sales arc collected over two quarters. In the quarter of sale 70% of the credit sales arc collected and the additional 30 % is collected in the quarter following the sale. Cost of Goods Sold equals 50% of Sales. Inventory purchases at ABC are made based on a desired ending inventory of 25% of the next quarter's Cost of Goods Sold, beginning inventory is $30.500. a All inventory purchases are made on credit and the payment cycle is over two quarters with 60% of the purchases being paid in the quarter of purchase and the remainder paid in the following quarter. Inventory units cost $5.00 each. Selling and administrative expenses include a variable and fixed portion. The variable portion is 30% of Sales and the fixed portion will be $17,000 for the 1^st quarter. $1 8.000 for the 2^nd quarter. $20,000 for the 3^rd quarter, and $22,000 for the 4^th quarter. All cash payments are made in the same quarter as the expense The fixed portion of S & A Expenses includes $3.000 of depreciation in the 1^st quarter. 4.000 in the 2^nd. 6.000 in the 3^nd. and 8.000 in the 4^th, The company plans on paying $2,000 in cash dividends each quarter and will make cash investments in equipment in the 2^nd quarter for $8,000. the 3^rd quarter for $12.000. and the 4^th quarters for $17,000. Required: Please complete the sales budget, cash receipts from sales, inventory purchases budget, cash payments for inventory, selling and administrative budget, cash payments for selling and administrative costs. Please clearly identify any amounts that arc relevant for the cash budget or the pro-forma financial statements. For bonus prints, complete a Cash Budget with the information provided in letter f

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit And Accounting Guide State And Local Governments

Authors: AICPA

1st Edition

1945498587, 978-1945498589

More Books

Students also viewed these Accounting questions

Question

Answer is not complete is not complete, Enmple: 2 ackagino by tho

Answered: 1 week ago

Question

3. Identify challenges to good listening and their remedies

Answered: 1 week ago

Question

4. Identify ethical factors in the listening process

Answered: 1 week ago