*Please show work on how you got the answer for any calclualtions in Income Stat
ID: 2393825 • Letter: #
Question
*Please show work on how you got the answer for any calclualtions in Income Statemnet and the Balance sheet. (Also I could not fit the entire Balance sheet chart on it, so it is suppose to be longer)
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter
As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:
b.
Actual sales for December and budgeted sales for the next four months are as follows:
c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.
Monthly expenses are budgeted as follows: salaries and wages, $39,000 per month: advertising, $57,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $45,940 for the quarter.
One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
During February, the company will purchase a new copy machine for $3,400 cash. During March, other equipment will be purchased for cash at a cost of $82,000.
Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local 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. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Schedule of expected cash disbursements for merchandise purchases:
Cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.)
Prepare an absorption costing income statement for the quarter ending March 31.
5. Prepare a balance sheet as of March 31
*Please show work on how you got the answer for any calclualtions in Income Statemnet and the Balance sheet. (Also I could not fit the entire Balance sheet chart on it, so it is suppose to be longer)
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter
Explanation / Answer
Income Statement For the quarter ended Mar 31 Sales 1,336,000 (409000+606000+321000) Cost of Goods Sold 801,600 (60% of sales) Gross Margin 534,400 Selling and Administrative expenses: Salaries and Wages (39000*3) 117,000 Advertising (57000*3) 171,000 Shipping (5% of Sales) 66,800 Other Expenses (3% of Sales) 40,080 Depreciation 45,940 440,820 Net Operating Income 93,580 Interest Expense from cash budget 2,070 Net Income 91,510 Balance Sheet Mar-31 Assets Current Assets Cash (cash budget) 58,425 Accounts Receivable 256,800 (March credit Sales) Inventory 32,550 (217000*60%*25%) Total Current Assets 347,775 Building and Equipment (net) 413,460 (374000+3400+82000-45940) Total Assets 761,235 Current Liabilities Accounts Payable 88500 Total Current Liabilitites 88500 Common Stock 500000 Retained Earnings 172735 (126225+91510-45000) Stockholders' Equity 672735 Total Stockholders' Equity and Liabilities 761235 Sales Budget Jan Feb March Total Sales 409000 606000 321000 1336000 Cash Sales (20%) 81800 121200 64200 267200 Credit Sales (80%) 327200 484800 256800 1068800
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