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Haas Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2015. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks.
October sales are estimated to be $250,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 8 percent per month. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a sales budget and a schedule of cash receipts.
The cost of goods sold is 60 percent of sales. The company desires to maintain a minimum ending inventory equal to 10 percent of the next month’s cost of goods sold. However, ending inventory of December is expected to be $12,000. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the following month. Assume that all purchases are made on account. Prepare an inventory purchases budget and a cash payments budget for inventory purchases. (Round your answers to the nearest whole dollar amount.)
The capital expenditures budget indicates that Haas will spend $164,000 on October 1 for store fixtures, which are expected to have a $20,000 salvage value and a three-year (36-month) useful life.
Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred. Prepare a selling and administrative expenses budget and a cash payments budget for selling and administrative expenses. (Round your answers to nearest whole dollar amount.)
Haas borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 1 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $12,000 cash cushion. Prepare a cash budget. (Any repayments/shortage which should be indicated with a minus sign. Round your answers to nearest whole dollar amount.)
Prepare a pro forma income statement for the quarter. (Round your answers to nearest whole dollar amount.)
Prepare a pro forma balance sheet at the end of the quarter. (Amounts to be deducted should be indicated by a minus sign.)
Prepare a pro forma statement of cash flows for the quarter. (Amounts to be deducted should be indicated by a minus sign. Round your answers to nearest whole dollar amount.)
Haas Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2015. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks.
October November December Sales Budget Cash sales Sales on account Total budgeted sales 100,000108,000116,640 174,960 $ 250,000270,000$ 291,600 150,000 162,000 Schedule of Cash Receipts Current cash sales Plus collections from A/R Total collections 100,000108,000116,640 162,000 $100,000258,000$ 278,640 150,000Explanation / Answer
Cash budget
Proforma Income Statement
Proforma Balance sheet
Proforma Statement of Cash flows
October November December Beginning cash balance $0 $12660 $12000 Plus: Cash receipts 100000 258000 278640 Cash available 100000 270660 290640 Less: Payments For inventory purchases 116340 164167 167614 For sellig and administrative expenses 29000 43300 44732 Interest expense 0 2220 1730 Purchase of store fixtures 164000 Total budgeted payments 309340 209687 214076 Payments minus receipts Surplus (shortage) (209340) 60973 76564 Financing activity Borrowing (repayment) 222000 (48973) (64564) Ending cash balance $12660 $12000 $12000Related Questions
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