ne statement. c. Ms. Priest estimates next years ending inventory will be $20,00

Question

ne statement. c. Ms. Priest estimates next years ending inventory will be $20,000 for peaches and $40,000 for oranges. Prepare the company's inventory purchases budgets for the nextyea.s terly figures by product od opay's inventory purchases budgets for the next year, showing quar- Problem 7-23A Preparing a master budget for retail company account balances with no beginning Haas Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2015. The company president formed c a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks Required Round all computations to two decimal points October sales are estimated to be $250,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 8 percent per month. Prepare a sales budget. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts. The cost of goods sold is 60 percent of sales. The company desires to maintain a minimum ending inventory equal to 10 percent of the next month's cost of goods sold. However, end- ing inventory of December is expected to be $12,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. The company pays 70 percent of accounts payable in the month of purchase and the remain- ing 30 percent in the following month. Prepare a cash payments budget for inventory purchases. a. b. e. d. e. Budgeted selling and administrative expenses per month follow

Explanation / Answer

Sales Budget for 1st Oct to 31st Dec.2015 Income statement for the quarter Month Oct Nov Dec Particulars Amt In $ Sales 250000 270000 291600 Sales 8,11,600.00 Sales Breakup (-) Cost of goods sold 4,86,960.00 Cash Sales 100000 108000 116640 (-) Selling & Admin.exp. 1,45,012.00 Credit sales 150000 162000 174960 (-) Interest on borrowed funds              60.00 Net Income 1,79,568.00 Cash Receipts Budget Month Oct Nov Dec Cash flow statement for the quarter A/R Collection 0 150000 162000 Particulars Amt In $ Cash sales 100000 108000 116640 Inflow Total Cash Receipts 100000 258000 278640 Capital Introduced 1,04,572.80 Cash sales 3,24,640.00 Inventory purchase budget A/R Collection 3,12,000.00 Month Oct Nov Dec Amount Borrowed        6,000.00 Cost of goods sold 150000 162000 174960 Total Inflow 7,47,212.80 (+) Month end Inventory 16200 17496 12000 Outflow (-) Opening Inventory 0 16200 17496 Store Fixture purchase 1,64,000.00 A/P Payments 4,48,120.80 Inventory purchase 166200 163296 169464 Selling & admin exp. 1,17,032.00 Borrowed fund repaid        6,000.00 Cash Payment Budget for Inventory purchase Interrest on borrowed fund              60.00 Month Oct Nov Dec Total Outflow 7,35,212.80 Accounts Payable 116340 164167.2 167613.6 Cash balance (Inflow - Outflow)      12,000.00 Selling & Administrative Budget Month Oct Nov Dec Balance sheet at the end of Quarter 31st December Salary 18000 18000 18000 Particulars Amt In $ Sales Commission 12500 13500 14580 Assets Supplies exp. 5000 5400 5832 Store Fixture 1,64,000.00 Utilities 1400 1400 1400 Accounts receivable 1,74,960.00 Depreciation on store fixture 4000 4000 4000 Inventory      12,000.00 Rent 4800 4800 4800 Cash balance      12,000.00 Misecelleneous 1200 1200 1200 Total 46900 48300 49812 Total Assets 3,62,960.00 Cash payment budget for Selling & Administrative exp. Liabilities Month Oct Nov Dec Accumulated depreciation      12,000.00 Salary 18000 18000 18000 Accounts Payable      50,839.20 Sales Commission 0 12500 13500 Sales Commission payable      14,580.00 Supplies exp. 5000 5400 5832 Utilities payable        1,400.00 Utilities 0 1400 1400 Rent 4800 4800 4800 Retained earnings 1,79,568.00 Misecelleneous 1200 1200 1200 Common stock 1,04,572.80 Total 29000 43300 44732 Total Liabilities 3,62,960.00 Cash Budget for borrowed amount Amount borrowed 1000 2000 3000 1% Interest per month 10 20 30

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