Saved Problem 8-29 Completing a Master Budget LO8-2, Lo8-4, LO8-7, L08-8, LO8-9,

Question

Saved Problem 8-29 Completing a Master Budget LO8-2, Lo8-4, LO8-7, L08-8, LO8-9, LO8-10) The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods he folowing data relate to the operatiors Current assets as of March 31 $ 7,600 $20,400 40,200 Building and equipment, net $128,400 $ 23,925 $150,000 22,675 Cash Accounts receivable Inventory Accounts payable Common stock Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) $ 51,080 April May June July $67,800 $72,888 $97,808 $48,888

Explanation / Answer

Hi Requirement was not clear from the question, however giving below all the needed schedule from the perspective of master budget.

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1. Expected Cash Collection' Mar Apr May Jun Jul Quarter Total Sale 51000 67000 72000 97000 48000 236000 Cash Sales A 60% 30600 40200 43200 58200 28800 141600 Credit Sale B-Collection in following month 40% 20400 26800 28800 38800 76000 Total Cash Collection (A+B) 60600 70000 87000 2a. Purchases budget Mar Apr May Jun Jul Quarter Budgeted cost of goods sold 75% of sale 38250 50250 54000 72750 36000 177000 Add: Ending Inventory 80% of subsequent month COGS 40200 43200 58200 28800 Total Needs 93450 112200 101550 Less: Beginning Inventory Closing of last month is beginging 40200 43200 58200 28800 Required Inventory Purchase 53250 69000 43350 2b. Cash Disbursment Schedule Mar Apr May Jun Jul Quarter Beginning Accounts Payable 23925 one half paid in same month (50% in same & 50% in next month) of Inventory purcase in Part 2a 26625 34500 21675 one half paid in following month 26625 34500 21675 Total Cash Disbursment 50550 61125 56175 2c. Expense Schedule Mar Apr May Jun Jul Quarter -Comissions (12% of Sales) 8040 8640 11640 28320 -Rent 2400 2400 2400 7200 -Other 6% of sale 4020 4320 5820 14160 Total 14460 15360 19860 49680

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