Hillyard Company, an office supplies specialty store, prepares its master budget
ID: 2552304 • Letter: H
Question
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. Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings S 54,000 211,200 59,850 364,000 S 89,325 500,000 99,725 $ 689,050 S 689,050 b. Actual sales for December and budgeted sales for the next four months are as follows December(actual) January February March April $264,000 $399,000 $596,000 $311,000 $207,000Explanation / Answer
** Credit Sales are received in the next month so shown in the next month in collection
Answer 2 a.
3. April Month Calculation 60% of $ 207,000 i.e., $ 124,200.
2. For December Purchases figure already put in question is taken
Hillyard Company
Cash Budget
Answer 4:
Net Operating Income
Answer 5
$ 129,920
Answer 1 Hillyard Company Schedule of Expected Cash Collections Month December January February March Quarter Cash Sales * $ 79,800 $ 119,200 $ 62,200 $ 261,200 Credit Sales ** $ 211,200 $ 319,200 $ 476,800 $ 1,007,200 Total Collections $ 291,000 $ 438,400 $ 539,000 $ 1,268,400 Working Hillyard Company Schedule of Expected Cash Collections Month December January February March Quarter Total Sales $ 264,000 $ 399,000 $ 596,000 $ 311,000 $ 1,306,000 Cash Sales @ 20% $ 52,800 $ 79,800 $ 119,200 $ 62,200 $ 261,200 Credit Sales @ 80% $ 211,200 $ 319,200 $ 476,800 $ 248,800 $ 1,044,800 Note: * Cash Sales is received in the same month so it is shown in the same month** Credit Sales are received in the next month so shown in the next month in collection
Answer 2 a.
Hillyard Company Merchandice Purchases Budget Month Basis January February March April Quarter (i) Budgetted Cost of Goods Sold $ 239,400 $ 357,600 $ 186,600 $ 124,200 $ 783,600 (ii) Add Desired Inventory 25% of (i) next month $ 89,400 $ 46,650 $ 31,050 $ 167,100 (iii) Total needs (i) + (ii) $ 328,800 $ 404,250 $ 217,650 $ 950,700 (iv) Less Beginning inventory (ii) of previous month $ 59,850 $ 89,400 $ 46,650 $ 195,900 (v) Required Purchases (iii) - (iv) $ 268,950 $ 314,850 $ 171,000 $ 754,800 Note: 1. Budgetted Cost of Good Sold is 60 % of Total Sales Value 2. Desired inventory is 25 % of next month COGS3. April Month Calculation 60% of $ 207,000 i.e., $ 124,200.
Answer 2 -b Hillyard Company Schedule of Expected Cash Disbursement for Merchandice Purchases Month December January February March Quarter December Purchases $ 89,325 $ 89,325 January Purchases $ 134,475 $ 134,475 $ 268,950 February Purchases $ 157,425 $ 157,425 $ 314,850 March Purchases $ 85,500 $ 85,500 Total cash disbursements for purchases $ 223,800 $ 291,900 $ 242,925 $ 758,625 Note 1. 50% of Purchases are paid in current month and rest in next month2. For December Purchases figure already put in question is taken
Answer 3Hillyard Company
Cash Budget
Month December January February March Quarter Beginning Cash Balance $ 54,000 $ 30,280 $ 30,700 $ 54,000 Add Cash Collections $ 291,000 $ 438,400 $ 539,000 $ 1,268,400 Total Cash Available $ 345,000 $ 468,680 $ 569,700 $ 1,322,400 Less Cash disbursement Purchase of inventory $ 223,800 $ 291,900 $ 242,925 $ 758,625 Selling & Admin Expenses $ 127,920 $ 143,680 $ 120,880 $ 392,480 Purchase of Equipment $ 2,400 $ 77,000 $ 79,400 Cash Dividends $ 45,000 $ - $ - $ 45,000 Total Cash Disbursement $ 396,720 $ 437,980 $ 440,805 $ 1,275,505 Excess (deficiency) of cash $ (51,720) $ 30,700 $ 128,895 $ 46,895 Financing Borrowings $ 82,000 $ - $ - $ 82,000 Repayments $ - $ - $ 82,000 $ 82,000 Interest $ 2,460 $ 2,460 Total Financing $ 82,000 $ - $ (84,460) $ (2,460) Ending Cash Balance $ 30,280 $ 30,700 $ 44,435 $ 44,435 Working 1. Interest on Loan 1% of 82000 for 3 months = 2460 2. Expenses working Month December January February March Quarter Salaries & Wages $ 29,000 $ 29,000 $ 29,000 $ 87,000 Advertising $ 67,000 $ 67,000 $ 67,000 $ 201,000 Shipping @ 5% on Sales $ 19,950 $ 29,800 $ 15,550 $ 65,300 Other Expenses @ 3% on Sales $ 11,970 $ 17,880 $ 9,330 $ 39,180 Total Expenses Cash $ 127,920 $ 143,680 $ 120,880 $ 392,480 Depreciation $ 14,780 $ 14,780 $ 14,780 $ 44,340 Total Expenses $ 142,700 $ 158,460 $ 135,660 $ 436,820Answer 4:
Hillyard Company Income Statement For Qtr Ended March 31st Sales $ 1,306,000 Cost Of Goods Sold: Opening Inventory $ 59,850 Add: Cost of Goods Purchased $ 754,800 Cost of Goods Available for Sales $ 814,650 Less Closing Inventory $ 31,050 $ 783,600 Gross Profit $ 522,400 Selling & Admin Expenses Selling & Admin Expenses $ 392,480Net Operating Income
Answer 5
Hillyard Company Income Statement For Qtr Ended March 31st Assets Current Assets Cash $ 44,435 Account Receiveable $ 248,800 Inventory $ 31,050 Total Current Assets $ 324,285 Building & Equipments $ 399,060 Total Assets $ 723,345 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable $ 85,500 Stockholders Equity Common Stock $ 500,000 Retained Earnings (Balancing Fig) $ 137,845 Total Liabilities and stockholders equity $ 723,345$ 129,920
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