Everything that is a yellow square needs filled in please Hillyard Company, an o

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Everything that is a yellow square needs filled in please

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 a. S 48,000 206,400 58,950 358,000 Cash Accounts receivable Buildings and equipment (net) Accounts payable Common stock Retained earnings S 87,525 500,000 83,825 S 671,350 $671,350 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March S258,000 S393,000 S590,000 S304,000 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 d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $23,000 per month: advertising $63,000 per month, shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $43,380 for the quarter. Each month's ending inventory should equal 25% of the following month's cost of goods sold 3 f. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in h. During February, the company will purchase a new copy machine for $1,800 cash. During March, other i. equipment will be purchased for cash at a cost of $74,000 During January, the company will declare and pay $45,000 in cash dividends 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 j.

Explanation / Answer

1) Schedule of Expected Cash collections: January February March Quarter cash sales 78600 118000 60800 257400 credit sales 206400 314400 472000 992800 285000 432400 532800 1250200 2-a) Merchandise Purchase Budget: budgeted cost of goods sold 235800 354000 182400 772200 add desired ending inventory 88500 45600 30150 30150 total needs 324300 399600 212550 802350 less beginning inventory 58950 88500 45600 58950 required purchases 265350 311100 166950 743400 2-b) Schedule of expected cash disbursements for merchandise purchase december puchase 87525 87525 january purchase 132675 132675 265350 february purchase 155550 155550 311100 march purchase 83475 83475 220200 288225 239025 747450 3) Cash budget beginning cash balance 48000 30360 39535 48000 add cash collections 285000 432400 532800 1250200 total cash available 333000 462760 572335 1298200 Less Cash disbursements: purchase of inventory 220200 288225 239025 747450 selling and administrative exp 117440 133200 110320 360960 purchases of equipment 1800 74000 75800 cash dividends 45000 45000 total cash disbursements 382640 423225 423345 1229210 excess cash/deficiency -49640 39535 148990 68990 financing: borrowings 80000 0 0 80000 repayments 0 0 -80000 -80000 interest 0 0 -2400 -2400 total financing 80000 0 -82400 -2400 Ending cash balance 30360 39535 66590 66590 4) Absorption Costing Income Statement sales revenue 1287000 cost of goods sold: beginning balance 58950 add purchases 743400 inventory available for sale 802350 less ending inventory 30150 772200 gross profit 514800 selling & administrative exp: salaries & wages 69000 advertising 189000 shipping 64350 other expenses 38610 depreciation 43380 404340 operating income 110460 interest expense 2400 (80000*.01*3) net income 108060 5) Balance sheet ASSETS: Current Assets: cash 66590 accounts receivable 243200 inventory 30150 339940 buildings & equipment-net 390420 730360 LIABILITIES: Current liabilities: accounts payable 83475 83475 Stock holders' equity: common stock 500000 retained earnings 146885 646885 730360

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