TAB 1/DATA 1. Insert all the data given below. This is the only TAB which can ha
ID: 2717439 • Letter: T
Question
TAB 1/DATA
1. Insert all the data given below. This is the only TAB which can have hard coded entries. The balance sheet from the last accounting period is given.
TAB 2/BUDGET
Prepare a master budget for the three-month period ending June 30, 2012. You MUST use formulas in all cells, not constant numbers. That means all cells in your budget must be linked to the data from TAB 1 or completed data from TAB 2. A template has been provided. Include the following detailed budgets:
1. a. A sales budget by month and in total.
b. A schedule of expected cash collections from sales, by month and in total.
c. A merchandise purchases budget in units and in dollars. Show the budget by and in total.
d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.
2. A cash budget. Show the budget by month and in total.
TAB 3/INCOME STATEMENT
1. A budgeted income statement for the three month period ending June 30. Use the contribution approach. You MUST use formulas in all cells, not constant numbers. A partial template has been provided.
TAB 4/BALANCE SHEET
1. A budgeted balance sheet as of June 30. You MUST use formulas in all cells, not constant numbers. A template has been provided.
DATA:
The company desires a minimum ending cash balance each month of $10,000.
The ties are sold to retailers for $10.00 each. Recent and forecasted sales in units are as follows:
January (actual) 25,000 June 60,000
February (actual) 30,000 July 35,000
March (actual) 32,000 August 40,000
April 40,000 September 32,000
May 50,000
The large buildup in sales before and during June is due to Father’s Day. Ending inventories are supposed to equal 80% of the next month’s sales in units. The ties cost the company $6 each.
Purchases are paid as follows: 50% in the month of purchase and the remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25% of a month’s sales are collected by month-end. An additional 50% is collected in the following month, and the remaining 25% is collected in the second month following sale. Bad debts have been negligible.
The company’s monthly selling and administrative expenses are as follows:
Variable:
Sales commissions $1.50 per tie
Fixed:
Wages and salaries $22,000
Utilities 14,000
Insurance 1,200
Depreciation 1,500
Miscellaneous 3,000
All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance expired. Land will be purchased during May for $20,000 cash. The company declares dividends of $12,000 each quarter, payable in the first month of the following quarter.
The company has an agreement with a bank that allows it to borrow in increments if $1,000 at the beginning of each month, up to a total loan balance of$100,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $10,000 in cash.
Excel template Q Search Sheet Home Insert Page Layout Formulas DataReviewView Conditional Formatting Formatting . 1 MS Sans Serif 10 A A General Font / Format as Table as $ % , 4,0 ,00 Paste Editing Cell Styles Minimum cash balance each month: 0 Newport Tie Company Balance Sheet March/31/2011 7 Cash 8 Accounts Receivable (75,000 February Sales 9 and $240,000 March Sales) 10 Merchandise Inventory 11 Prepaid Insurance 12 Fixed Assets Net of Depreciation 13 Total Assets 14,000 315,000 192,000 708,100 Liabilities and Stockholders' Equity 15 6 Liabilities 17 Accounts Payable 18 Dividends Payable 19 Total Liabilities 115,200 127 21 Stockholders' Equity 22 Common stock 23 Retained Eamings 24 Total Stockholders'Equity 25 Total Liabilities and Stockholders' Equity 26 580,900 708,100 28 29 Salcs 30 January (actual) 31 February (actual) 32 March (actual) 33 April Units Total 25,000$250,000 30,000 5300,000 32,0005320,000 40,000 $400,000 Data(1) get(2) IS (3) BS(4) Ready + 100%Explanation / Answer
(Question are difficult to locate in sheet) for solution of this, please refer to below example
Further for sample example on Budget
Exercise 8-27: Completing a Master Budget Given: Nordic Company, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the second quarter. a. As of March 31 (the end of the prior quarter), the company's balance sheet showed the following account balances: Cash $9,000 Accounts Receivable 48,000 Inventory 12,600 Building and equipment 214,100 Accounts Payable $18,300 Capital Stock 190,000 Retained Earnings 75,400 Total $283,700 $283,700 b. Actual sales for March and budgeted sales for April-July are as follows: Actual Budgeted Budgeted Budgeted Budgeted March April May June July $245,000 $60,000 $70,000 $85,000 $90,000 $50,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following the sale. The A/R at March 31 are a result of March credit sales. d. The company's gross margin % is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: Salaries and wages $7,500 per month Shipping 6% of sales Advertising $6,000 per month Other expenses 4% of sales Depreciation, including depreciation on new assets acquired during the quarter, will be $6,000 for the quarter f. Each month's EI should equal 30% of the following month's COGS g. Half of a month's inventory purchases are paid for in the month of purchase and half in the following month. h. Equipment purchases during the quarter will be as follows: April $11,500 May $3,000 i. Dividends declared and paid in June $3,500 j. Management wants to maintain a minimum cash balance of $8,000. $8,000 The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: Using the data above, complete the following statements and schedules for the second quarter: 1. Schedule of expected cash collections: Actual March April May June Total Total Sales $60,000 $70,000 $85,000 $90,000 $305,000 Collections from: April May June Quarter Cash Sales (20%) $14,000 $17,000 $18,000 $49,000 Credit Sales (80%, 1-month delay) 48,000 56,000 68,000 172,000 Total Cash Collections $62,000 $73,000 $86,000 $221,000 2. a. Merchandise purchases budget: March April May June July Total Sales $60,000 $70,000 $85,000 $90,000 $50,000 March April May June Quarter Budgeted COGS (60% of Sales) $36,000 $42,000 $51,000 $54,000 $147,000 Add desired EI (30% next COGS) 12,600 15,300 16,200 9,000 9,000 Total Needs $48,600 $57,300 $67,200 $63,000 $156,000 Less BI (30% of this month's COGS) 10,800 12,600 15,300 16,200 12,600 Purchases $37,800 $44,700 $51,900 $46,800 $143,400 b. Schedule of expected cash disbursement for merchandise purchases: March April May June Quarter 50% paid in month of purchase $18,300 $22,350 $25,950 $23,400 $71,700 50% paid In month after purchase 18,300 22,350 25,950 66,600 Total $40,650 $48,300 $49,350 $138,300 3. Schedule of expected cash disbursements for selling & administrative April May June Quarter Salaries and Wages $7,500 $7,500 $7,500 $22,500 Shipping (6% of sales) $4,200 $5,100 $5,400 $14,700 Advertising $6,000 $6,000 $6,000 $18,000 Other Expenses (4% of sales) $2,800 $3,400 $3,600 $9,800 Total Selling & Admin. $20,500 $22,000 $22,500 $65,000 4. Cash Budget: April May June Quarter Cash balance, beginning $9,000 $8,350 $8,050 $9,000 Add cash collections 62,000 73,000 86,000 221,000 Total cash available $71,000 $81,350 $94,050 $230,000 Less disbursements: Inventory purchases $40,650 $48,300 $49,350 $138,300 Selling & Administrative $20,500 $22,000 $22,500 $65,000 Equipment purchases $11,500 $3,000 $14,500 Dividends (Declared & Paid) $3,500 $3,500 Total disbursements $72,650 $73,300 $75,350 $221,300 Net Cash Inflow before Financing ($1,650) $8,050 $18,700 $8,700 Available for repayment $0 $50 $10,700 $700 Financing: Borrowings $10,000 $0 $0 $10,000 Repayments $1,000 0 0 (10,000) ($10,000) Interest 1% 0 0 (300) ($300) Total Financing $10,000 $0 ($10,300) ($300) Cash balance, ending $8,350 $8,050 $8,400 $8,400 Desired minimum cash balance $8,000 $8,000 $8,000 $8,000 Excess Over Desired Minimum $350 $50 $400 $400 5. Prepare an absorption costing I/S statement for the quarter ending June 30 Nordic Company Absorption Costing Income Statement For the Quarter Ended June 30th Sales $245,000 Cost of Goods Sold: Beginning Inventory $12,600 Add purchases 143,400 Goods available for sale $156,000 Ending Inventory 9,000 147,000 0.6 Gross Margin $98,000 0.4 Selling & Administrative Expenses 71,000 Net Operating Income $27,000 Less Interest Expense (300) Net Income $26,700 6. Prepare a balance sheet as of June 30. Nordic Company Balance Sheet 6/30/20?? Assets: Current Assets: Cash $8,400 Accounts Receivable 72,000 Inventory 9,000 $89,400 Long-Term Assets: Net Building and Equipment 222,600 Total Assets $312,000 Equity: Current Liabilities: Accounts Payable $23,400 Stockholders' Equity Capital Stock $190,000 Retained Earnings** 98,600 $288,600 Total Equity $312,000 **Retained Earnings: Beginning Balance $75,400 Plus: Net Income 26,700 Less: Dividends Declared (3,500) Ending Balance $98,600Related Questions
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