The company sells many styles of earrings, but all are sold for the same price-$16 per pair. Actual sales of earrings fo

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The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 1 (70.69 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 2 (62.91 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 3 (73.5 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 4 (42.39 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 5 (38.17 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 6 (44.91 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 7 (32.91 KiB) Viewed 14 times

The Company Sells Many Styles Of Earrings But All Are Sold For The Same Price 16 Per Pair Actual Sales Of Earrings Fo 8 (28.8 KiB) Viewed 14 times

The company sells many styles of earrings, but all are sold for the same price-$16 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): 22,000 January (actual) February (actual) June (budget) July (budget) 52,000 32,000 28,000 March (actual) 42,000 August (budget) 30,000 September April (budget) 67,000 27,000 (budget) May (budget) 102,000 The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $5.00 for a pair of earrings. One-half of a month's purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Monthly operating expenses for the company are given below: Variable: Sales commissions 48 of sales Fixed: $ 300,000 Advertising Rent $ 28,000 Salaries $ 126,000 Utilities Insurance $ 12,000 $ 4,000 $ 24,000 Depreciation Insurance is paid on an annual basis, in November of each year. The company plans to purchase $21,000 in new equipment during May and $50,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $22,500 each quarter, payable in the first month of the following quarter.
Insurance is paid on an annual basis, in November of each year. The company plans to purchase $21,000 in new equipment during May and $50,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $22,500 each quarter, payable in the first month of the following quarter. The company's balance sheet as of March 31 is given below: Assets Cash $ 84,000 Accounts receivable ($44,800 February sales; $537,600 March sales) Inventory 582,400 134,000 26,000 Prepaid insurance Property and equipment (net) 1,050,000 Total assets $ 1,876,400 Liabilities and Stockholders' Equity Accounts payable Dividends payable $ 110,000 22,500 1,000,000 743,900 Common stock Retained earnings Total liabilities and stockholders' equity $ 1,876,400 The company maintains a minimum cash balance of $60,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $60,000 in cash.
Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. a. A sales budget, by month and in total. b. A schedule of expected cash collections, by month and in total. c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total. d. A schedule of expected cash disbursements for merchandise purchases, by month and in total. 2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $60,000. 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach. 4. A budgeted balance sheet as of June 30. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 2 Req 3 Req 4 Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected ci month and in total. Earrings Unlimited Schedule of Expected Cash Collections April May Quarter $ February sales 60,000 March sales April sales May sales June sales Total cash collections $ 60,000 $ < Prev Mudima < Req 1A 1 of 1 0 $ June Next > 60,000 0 0 0 60,000 0 $ Req 1C >
Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 2 Req 3 Req 4 Prepare a master budget for the three-month period ending June 30 that includes a merchandise purchases and in dollars. Show the budget by month and in total. (Round unit cost to 2 decimal places.) Earrings Unlimited Merchandise Purchases Budget April June Quarter Budgeted unit sales Total needs Required purchases Unit cost Required dollar purchases $ < Req 1B 0 0 0 $ May 0 0 os Req 1D > 0 0 0 $ 0 0 0 0
Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 2 Req 3 Req 4 Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected ci for merchandise purchases, by month and in total. Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts payable $ April purchases May purchases June purchases Total cash payments $ 0 $ 0 $ < Req 1C 0 0 0 0 0 0 Req 2 >
keq 1A keq 18 Keq 1C Keq 10 Keq 2 keq s keq 4 Prepare a master budget for the three-month period ending June 30 that includes a cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $60,000. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Earrings Unlimited Cash Budget For the Three Months Ending June 30 April June Quarter Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Merchandise purchases Advertising Rent Salaries Commissions Utilities Equipment purchases Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance $ 0 0 0 0 0 $ May 0 0 0 0 0 $ 0 0 0 0 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Keq 1A Keq 18 Req 1C Keq 10 Keq Z Keq 3 Keq 4 Prepare a master budget for the three-month period ending June 30 that includes a budgeted income statement for the three- month period ending June 30. Use the contribution approach. Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Variable expenses: Fixed expenses: < Req 2 0 0 0 0 Req 4 >
Keq 1A Keq 18 Keq 10 Keq ID Keq 2 Keq 3 Keq 4 Prepare a master budget for the three-month period ending June 30 that includes a budgeted balance sheet as of June 30. Earrings Unlimited Budgeted Balance Sheet June 30 Assets $ Liabilities and Stockholders' Equity $ < Req 3 Total assets Total liabilities and stockholders' equity 0 0 Reg 4 >