Data regarding the store\'s operations follow: 1.Sales are budget at$345,000 for
ID: 2372102 • Letter: D
Question
Data regarding the store's operations follow:
1.Sales are budget at$345,000 for November, $230,000 for December, and $320,000 for January.
2.Collections are expected to be 60% in the month sale, 34% in the month following the sales, and 6% uncollectible.
3. The cost of goods sold is 70% of sales.
4.The company desires ending merchandise inventory to equal 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
5.Other monthly expenses to be paid in cash are $12,000.
6.Monthly depreciation is $16,000.
7.Equipment purchases of $110,000 were paid in cash in November.
8.Dividends of $35,000 were declared and paid in December.
9.Any borrowing must be in $1,000 increments at 7% interest. Assume interest accrues at the beginning of the month and is paid at the end of the month. The company must maintain a minimum cash balance of $5,000.
10.Ignore income taxes
Statement of Finance Position
October 31
Assets
Cash-22,000
Accounts receivable(net of allowance for uncollectible accounts)-82,000
Merchandise inventory-166,400
Property, plant and equipment(net of 658000 accumlated depreciation)-1,170,000
Total assets-1,440,400
Liabilities and stockholder's Equity-199,000
Accounts payable-840,000
common stock-401,400
Total liabilities and stockholder's equity-1,440,400
Prepare the following budgets for November and December and total for the two months in good form in excel:
a.prepare cash budget
b.prepare budgeted income statements
c.prepare a budgeted balance sheet
Explanation / Answer
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