Direct Equipment Projected Revenues & Expenses June August September Sales 85,000 86,275 87,569 88,883 52,700 53,491 54,

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Direct Equipment Projected Revenues Expenses June August September Sales 85 000 86 275 87 569 88 883 52 700 53 491 54 1 (227.27 KiB) Viewed 11 times

Direct Equipment Projected Revenues & Expenses June August September Sales 85,000 86,275 87,569 88,883 52,700 53,491 54,293 55,107 Cost of Goods Sold Gross Profit 32,300 32,785 33,276 33,775 Admin & Selling Costs 21,000 21,000 21,000 21,000 Net Income before Taxes 11,300 11,785 12,276 12,775 Information related to cash receipts 1) Cash sales are 80% and credit sales are 20% per month 2) Collections on credit sales are 60% in the month of sale and 40% in the following month Information related to purchases of direct materials 1) Purchases of Direct Materials are 32% of Sales 2) Direct material purchases are paid 50% in current month and 50% in following month 3) Ending Inventory needs to be 30% of the following month's Direct Materials Cost of Goods Sold 4) Accounts payable for purchases of direct materials June 30 was $13,600 Information related to cash 1) Beginning Cash Balance June 30 was $175,000 2) Admin & Selling Costs include $1,000 depreciation expense 3) Admin & Sales salaries are $4,350 per month (included in total Admin and Selling Costs) 4) Direct wages are 30% of sales 5) Wages are paid 80% in current month and 20% the following month 6) A dividend to the owners of 10% of the ending quarter's Net Income (after tax) is paid in Jan, Apr, Jul, Oct 7) April - June Net Income before taxes was $50,000 8) Quarterly estimated taxes are paid the month following the end of the quarter 9) Effective tax rate is 23%. 10) Direct Equipment operates on a calendar year basis Required - Prepare the following budgets for July - October 2) Production (direct material) July October November 90,216 91,569 55,934 56,773 34,282 34,796 21,000 21,000 13,282 13,796