The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as
ID: 2459590 • Letter: T
Question
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is given below:
Cash $7,000
651,000
a.
Sales are budgeted at $280,000 for June. Of these sales, $60,000 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the May 31 accounts receivable will be collected in June.
Purchases of inventory are expected to total $170,000 during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
Selling and administrative expenses for June are budgeted at $54,000 , exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,300 for the month.
The note payable on the May 31 balance sheet will be paid during June. The company’s interest expense for June (on all borrowing) will be $600 , which will be paid in cash.
g
During June, the company will borrow $21,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.
1.Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases.
2. Prepare a cash budget for June
3. Prepare a budgeted income statement for June using the absorption costing income statement format
4. Prepare a budgetted balance sheet as of June 30
Accounts receivable 75,000 Inventory 39,000 Buildings and equipment, net of depreciation 530,000 Total assets $ 651,000 Liabilities and Stockholders' Equity Accounts payable $ 113,000 Note payable 18,000 Capital stock 450,000 Retained earnings 70,000 Total liabilities and stockholders' equity $651,000
Explanation / Answer
Answer:1
Answer:2
Answer:3
Answer:4
Snapshot Inc. Schedule of Expected Cash Collections Cash sales- June $ 60,000.00 Collection on accounts receivables for June [(280000-60000)*.50] $ 1,10,000.00 May 31 balance $ 75,000.00 Total cash receipts $ 2,45,000.00 Snapshot Inc. Schedule of Expected Cash Disbursements May 31 accounts payable balance $ 1,13,000.00 June purchases $ 68,000.00 Total cash payments $ 1,81,000.00Related Questions
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