yellow cells require an excel formula
HEDRON BUDGET PROJECT, 2020 Cash Receipts Budget Total Cash Receipts, January: Total Cash Receipts, Jan - June: Uncollectible, January: Uncollectible, Jan June: $104,200 $842,847 $ 3,150 $ 20,118 Purchase Budget Total Purchases, Jan - June: $391,200 Cash Budget Total Cash Disbursements, Jan - June: $799,726 Ending Cash Balance, June: $ 58,121 Budgeted Income Statement Operating Expenses, Total: Net Income, Total: $508,318 $ 56,234 Budgeted Balance Sheet Total Assets: $621,023 Required: You need to prepare a comprehensive 6-month budget, including supporting schedules and a report for the period January 1, 2020 to June 30, 2020 for Hedron, Inc (a fictional company). This project must include: 1. Sales forecast and Budget. 2. Cash Receipts Budget. 3. Purchase Budget. 4. Cash Purchases Disbursements Budget. 5. Operating Expense Budget. 6. Summary Cash Budget. 7. Budgeted Income Statement. 8. Budgeted Balance Sheet. Notes and Hints 1. All 8 parts must be submitted before I grade the project. 2. The schedules/budgets must be prepared using the Excel template provided. 3. Part of this project is demonstrating proper use of Excel. You may only input a "hard number" into a pink cell. All yellow cells must be formula based (no numbers included - use appropriate cell referencing). 4. I recommend constructing the formulas for one month and then copying the formulas over to the remaining months. 5. Rounding is encouraged and you may ignore interest and taxes. 6. The budget templates and this instruction sheet are located on the Projects link in the content area in the course shell in blackboard. Make sure you save the file to excel and then open the file through Excel (not Internet Explorer). 7. Check figures are also located in the course shell in blackboard, content area, Projects link. INFORMATION FOR HEDRON, INC. BUDGET PROJECT 1. Hedren, Inc. is a company that re-sells one product, a particularly comfortable lawn chair. An overseas contractor makes the product exclusively for Hedren, so Hedren has no manufacturing-related costs. 2. As of 11/01/2019, each lawn chair costs Hedren S4 per unit. Hedren sells each chair for $10 per unit. 3. The estimated sales in units) are as follows: Nov 2019 11,250 Dec 2019 11,600 Jan. 2020 10,000 Feb. 2020 11,400 Mar. 2020 12,000 Apr. 2020 15,600 May 2020 18,000 June 2020 22,000 July 2020 18,000 4. Per an existing contract, the cost of each chair is scheduled to increase by 5% on March 1, 2020. In addition, because of increasing costs of plastic webbing, the cost is anticipated to increase by an additional 5% on May 1, 2020. To offset these increases, the company plans to raise the sales price to $11.25 per unit beginning May 1, 2020. The sales forecast (i.e., estimated sales in units) takes this price increase into account 5. Thirty percent of any month's sales are for cash, and the remaining 70% are on credit. Thirty percent of the credit sales are collected in the month of sale, 50% are collected in the following month, and 16% are collected in the second month after the sale. The remaining receivables are deemed uncollectible. Bad debts are written off in the month the debt is deemed uncollectible (e.g. if the sale is made in January and is not collected by the end of March, it is written off in March.) No accrual for estimated bad debts is made in the month of sale. 6. The firm's policy regarding inventory is to stock (i.e. have in ending inventory) 40% of the forecasted demand in units (i.e., estimated sales) for the next month. Hedren uses the first-in, first-out (FIFO) method in accounting for inventories. 7. Forty percent of the inventory purchases are paid for in the month of purchase and the remaining 60% are paid in the following month (i.e. all the previous month's Accounts Payable are paid off by the end of any month.) 8. Per a prior contract, a cash payment of $50,000 for equipment previously purchased is due in January. Another payment of $30,000 is due in February. Depreciation on the equipment previously purchased is included in the overhead cost detailed in item 11 below. Also, dividends of $12,000 are to be paid in March. Page 2 of 3 9. Monthly operating expenses consist of the following (if these are cash expenses, they are paid when incurred): Salaries and Wages $3,000 Sales Commissions 7% of sales revenue Rent $8,000 Other Variable Cash Expenses 6% of sales revenue Supplies Expense: See note (1) $2,000 Other: See note (2) $48,000 Note: 1. Hedron maintains, on hand, one month's worth of supplies. 2. Other general and administrative overhead is expected to be $48,000 per month of this amount, $24,000 represents depreciation and other non-cash expenses. 10. The company must maintain a minimum cash balance of $15,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. Ignore interest on the loan in your calculations, but minimize the amount Supplies Expense: See note (1) $2,000 Other: See note (2) $48,000 Note: 1. Hedren maintains, on hand, one month's worth of supplies. 2. Other general and administrative overhead is expected to be $48,000 per month. of this amount, $24,000 represents depreciation and other non-cash expenses. 10. The company must maintain a minimum cash balance of $15,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. Ignore interest on the loan in your calculations, but minimize the amount borrowed and pay off any loans as soon as possible. 11. Cash on hand as of December 31, 2019 is expected to be $15,000. In addition, there will be no notes payable as of this date. 12. See below the other Balance Sheet accounts with their balances as of December 31, 2019: Supplies............ ..$ 2,000 Property, Plant and Equipment..........970,000 Accumulated Depreciation........... 526,475 Common Stock 200,000 Retained Earnings........... 322,811 D cron, Inc Sales Budget Fotihemos ending June 20 Nov 19 Dec 10 Feb 20 A20 May 20 * Budged 9 Seperunt 10 Totale 11 12 Cash Sales 13 Credits 14 15 Casa Soes 16 Dedit Sales 17 Totales 10 19 20 Current month Collection 211 month NR Collection 22 months prior NR Collections 23 Uncolectible Heron, Inc Cash Collections For the sending June 20 20 Mar 70 A70 May 20 June 20 mos 30 Current month cash ales 31 Ourrent month ARO 32 month Collections 33 MNRC 4 Toucas colections 35 Bad Dot De 37 30 wong 39 Hodon, in Prelut For the conting in 20 MO My0 June 20 43 46 45 Bulo 46 Added ending way 47 To neede 4 Leginning inventory 4 Push 50 5 Coupe Purchase 53 54 of these Se Puch 50 57 Hedron, Inc. Schedule of Budgeted Cash Disbursements for Merchandise Purchases For tho 6 mos ending June 20 Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6 mos total Variable Operating Expenses: Sales Commissions, % of Revenue Other Variable Cash Expenses, % of Revenue 59 60 61 62 63 Cash purchases 64 1 month prior A/P Collections 65 Cash disbursements for merchandise purch 66 67 68 69 70 71 Fixed Operating expenses 72 Salaries and Wages 73 Rent 74 Supplies Expert 75 Other - Overhead 76 Other Depreciation 77 78 79 80 81 B2 B3 Salaries and Wages 84 Sales Commissions 85 Rent 85 Other Variable Cash Expenses B7 Supplies Expense 88 Other - Overhead 89 Other Depreciation 90 Bad Debt Expense 91 Total operating expenses 02 Depreciation and noncash Rom 93 Bad Debt Expense 04 Cash disbursements for operating expenses 95 96 Equipment payment - January 97 Equipment payment - February 90 Dividends - March 90 Mrimum Monthly Cash Budget Hedron, Inc. Operating Expense Budget For the 6 moe ending June 20 Jan 20 Feb 20 Mar20 Apr 120 May 20 June 20 6 mos focal 100 Hedron, Inc Cash Budget For the mos ending June 20 101 102 103 104 105 100 Cash balance beginning 107 Add collections from customers 108 Total cash available 109 Loss disbursements: Jan 20 Feb 20 Mar 20 Apr 120 May 20 June 20 mos total B C D G H J Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6 mos total Hedron, Inc Budgeted Income Statement For i mosending June 20 Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 TON 104 105 106 Cash balance, beginning 107 Add collections from customers 100 Total cash available 109 Less disbursements 110 Cash disbursements for merchandise purch 111 Cash disbursements for operating expenses 112 Equipment purchases 113 Dividends 114 Total cash disbursements 115 Excess of receipts over disbursements 110 Financing 117 Borrowing note 118 Repayments-note 116 Total financing 120 Cash balance, ending 121 122 123 124 125 126 127 128 Sales, 129 Cost of goods sold 130 Gross margin 131 Total operating expenses 132 Net Income 133 134 Hedron, Inc 135 Budgeted Balance Sheet 136 6/30/20 137 138 Alles 139 Current Assets 140 Cash 141 Accounts receivable 142 Supplies 143 Merchandise Inventory 144 Plant and Equipment 145 Buildings and Equipment 146 Accumulated Depreciation 147 Totsats 148 140 Liabilities and Equty 150 Accounts payable 151 Capital stock 152 Retained earnings 153 Total sabates and equity 154 155 FIFO Calculation Beg Inventory Beg Inventory Units Purchases - Units COGS - Units Ending Inventory Ending Inventory - Units Purchases COGS Jan Feb Mar Apr May Jun 0 1
