PROBLEM (40 points) - Prepare the following budget statements utilizing the info
ID: 2575555 • Letter: P
Question
PROBLEM (40 points) - Prepare the following budget statements utilizing the information provided in the attached Balance Sheet and supplemental information a) Schedule of Expected Cash Collections b) Schedule of Expected Cash Disbursements c) Income Statement and d) Balance Sheet Parks Corporation Balance Sheet October 31 Assets $ 8,000 72,000 30,000 500,000 Cas Inventory Plant and equipment, net of depreciation. 610,000 Liabilities and Stockholder's Equity $ 90,000 15,000 420,000 85,000 610,000 Accrued expenses . . . . Total liabilities and stockholder's equity... a) Sales are budgeted in November at $250,000. Cash sales are 24% in the current month with the remaining sales as credit. Of the credit sales 50% are collected in the current month and the remainder are collected in the following month Purchases for November are expected to be $200,000 with 40% paid in the current month and the remainder in the following month. b) c) Ending inventory for November is expected to be $40,000 d) Selling and Administrative expenses are budgeted at S53,000 including $2,000 of depreciation expenseExplanation / Answer
Answer
Total Sales
250000
Cash sales [24%]
60000
Credit Sale [76%]
190000
Collection of Cash in November of--
Amount $
A
November Sale (50%)
95000
B
Accounts receivables
72000
C
Cash Sales
60000
A+B+C
Total Cash collections
227000
Working
Purchases
200000
A
paid in November [40%]
80000
B
Accounts payable paid
90000
A+B
Cash payment for purchase
170000
A
Total Selling & Administrative expenses
53000
B
Depreciation
2000
C=A-B
Cash paid for Selling & Administrative expense
51000
A
Cash paid for purchases [calculated above]
170000
B
Cash paid for selling & administrative expenses [calculated above]
51000
C=A+B
Total cash disbursements
221000
A
Opening Inventory [given in B/S]
30000
B
Purchases during November[given]
200000
C
Closing Inventory [given]
40000
A+B-C
Cost of Goods Sold
190000
Income Statement
Revenue from Sale
250000
Expenses
Cost of Goods Sold
190000
Depreciation expense
2000
Selling & distribution expense
51000
Total Expenses
243000
Net Income [250000-243000]
7000
Working
Accounts
Cash
Accounts receivables
Accounts payable
Inventory
Plant & Equipment, net of depreciation
A
Opening Balance in given B/S
8000
72000
90000
30000
500000
B
Addition
[cash collections] 227000
[credit sale] 190000
[credit purchase] 200000
[purchases] 200000
0
C
Deductions
[cash disbursement] 221000
[cash received] 167000
[cash paid] 170000
[cost of goods sold] 190000
[depreciation] 2000
A+B-C
Closing Balance for November Balance Sheet
14000
95000
120000
40000
498000
Working
Balance Sheet
Shareholder's Equity and Liabilities
Amount
Shareholder's Equity
Common Stock
420000
Retained earnings
85000
Add: Net Income
7000
92000
A
Total Shareholders' Equity
512000
Liabilities
Accounts payable
120000
Accrued expense
15000
135000
B
Total Liabilities
135000
C=A+B
Total Shareholder's Equity and Liabilities
647000
Assets
Amount
Fixed Assets
Plant & Equipment,
A
net of depreciation
498000
Current Assets
Cash
14000
Accounts receivables
95000
Inventory
40000
149000
B
Total Current Assets
149000
C=A+B
Total Assets
647000
Total Sales
250000
Cash sales [24%]
60000
Credit Sale [76%]
190000
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