NEed hELP please! Colerain Corporation is a merchandising company that is prepar

Question

NEed hELP please! Colerain Corporation is a merchandising company that is preparing a profit plan for the third quarter of the calendar year. The companys balance sheet as of June 30 is shown below:

Estimated sales for July, August, September, and October will be $230,000, $250,000, $240,000, and $260,000, respectively.

All sales are on credit and all credit sales are collected. Each months credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

Each months ending inventory must equal 35% of the cost of next months sales. The cost of goods sold is 65% of sales. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining 50% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

Monthly selling and administrative expenses are always $55,000. Each month $5,000 of this total amount is depreciation expense and the remaining $50,000 relates to expenses that are paid in the month they are incurred.

The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30th. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30th. (Input all amounts as positive values. Omit the "$" sign in your response.)

Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30th. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Prepare an income statement for the quarter ended September 30th. (Input all amounts as positive values except losses which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Prepare a balance sheet as of September 30th. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)

Colerain Corporation
Balance Sheet
June 30 Assets   Cash $   88,000   Accounts receivable 123,000   Inventory 52,325   Plant and equipment, net of depreciation 240,000   Total assets $ 503,325 Liabilities and Stockholders Equity   Accounts payable $   62,000   Common stock 390,000   Retained earnings 51,325   Total liabilities and stockholders equity $ 503,325

Explanation / Answer

3)




   




Colerain Corporation



Income Statement



For the Quarter Ended September 30









Sale 720000



Cost of Good Sold 468000



Gross Profit 252000



Selling and administrative expenses 165000



Net Operating Income 87000



Interest Expenses 0



Net Income 87000



  

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