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Hillyard Company, an office supplies specialty store, gathered the following information to prepare its master budget for the first quarter of the year: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings March April Debits $ 52,000 209,600 59,550 362,000 A Credits b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February $ 262,000 $ 397,000 $ 594,000 $308,000 $ 205,000 $ 88,725 500,000 94,425 $ 683,150 $ 683,150 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December 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, $27,000 per month; advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. i. During January, the company will declare and pay $45,000 in cash dividends. i. Management wants to maintain a minimum cash balance of $30.000. The company has an agreement with a local bank allowing it

Hillyard Company, an office supplies specialty store, gathered the following information to prepare its master budget for the first quarter of the year: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings March April Debits $ 52,000 209,600 59,550 362,000 A Credits b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February $ 262,000 $ 397,000 $ 594,000 $308,000 $ 205,000 $ 88,725 500,000 94,425 $ 683,150 $ 683,150 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December 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, $27,000 per month; advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. i. During January, the company will declare and pay $45,000 in cash dividends. i. Management wants to maintain a minimum cash balance of $30.000. The company has an agreement with a local bank allowing it

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
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Dunny January, the company wil ucciare and pay, j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank allowing it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month, and for simplicity, we will assume 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 first quarter: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Budgeted cost of goods sold Add desired ending inventory Total needs Less beginning inventory Complete the merchandise purchases budget: X Answer is not complete. Required 3 Required 4 January $238,200* 89,100+ 327,300 59,550 Merchandise Purchases Budget February March $ 356,400 $ 184,800 $ 779,400✔ 46,200✔ 30,750✔ 30,750 810,150 135,300 402,600 89,100 Required 5 215,550 46,200✔ Quarter
Transcribed Image Text:Dunny January, the company wil ucciare and pay, j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank allowing it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month, and for simplicity, we will assume 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 first quarter: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Budgeted cost of goods sold Add desired ending inventory Total needs Less beginning inventory Complete the merchandise purchases budget: X Answer is not complete. Required 3 Required 4 January $238,200* 89,100+ 327,300 59,550 Merchandise Purchases Budget February March $ 356,400 $ 184,800 $ 779,400✔ 46,200✔ 30,750✔ 30,750 810,150 135,300 402,600 89,100 Required 5 215,550 46,200✔ Quarter
Hillyard Company, an office supplies specialty store, gathered the following information to prepare its master budget for the first quarter of the year: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory. Buildings and equipment (net) Accounts payable Common stock Retained earnings. Debits $ 52,000 209,600 59,550 362,000 March April Credits $ 88,725 500,000 94,425 $ 683,150 $ 683,150 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) $ 262,000 $397,000 January February $ 594,000 $ 308,000 $ 205,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December 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, $27,000 per month; advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. i. During January, the company will declare and pay $45,000 in cash dividends. i. Management wants to maintain a minimum cash balance of $30.000. The company has an agreement with a local bank allowing it
Transcribed Image Text:Hillyard Company, an office supplies specialty store, gathered the following information to prepare its master budget for the first quarter of the year: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory. Buildings and equipment (net) Accounts payable Common stock Retained earnings. Debits $ 52,000 209,600 59,550 362,000 March April Credits $ 88,725 500,000 94,425 $ 683,150 $ 683,150 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) $ 262,000 $397,000 January February $ 594,000 $ 308,000 $ 205,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December 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, $27,000 per month; advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. i. During January, the company will declare and pay $45,000 in cash dividends. i. Management wants to maintain a minimum cash balance of $30.000. The company has an agreement with a local bank allowing it
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please redo requirement 4 and 5 ASAP. exactly like the format of the picture.

Required 1 Required 2A Required 2B Required 3 Sales Cost of goods sold: Prepare an absorption costing income statement for the quarter ending March 31. Gross margin Selling and administrative expenses: Salaries and wages Advertising Shipping Depreciation Other expenses Hillyard Company Income Statement For the Quarter Ended March 31 Net operating income Interest expense Net income *********** 779,400 X 779,400 81,000 201,000 64,950 44,020 38,970 < Required 3 Required 4 $ 1,299,000 779,400 519,600 Required 5 429,940 89,660 2,490 87,170 Required 5
Transcribed Image Text:Required 1 Required 2A Required 2B Required 3 Sales Cost of goods sold: Prepare an absorption costing income statement for the quarter ending March 31. Gross margin Selling and administrative expenses: Salaries and wages Advertising Shipping Depreciation Other expenses Hillyard Company Income Statement For the Quarter Ended March 31 Net operating income Interest expense Net income *********** 779,400 X 779,400 81,000 201,000 64,950 44,020 38,970 < Required 3 Required 4 $ 1,299,000 779,400 519,600 Required 5 429,940 89,660 2,490 87,170 Required 5
Prepare a balance sheet as of March 31. Current assets: Cash Accounts receivable Inventory Buildings and equipment, net Total current assets Total assets Current liabilities: Hillyard Company Balance Sheet March 31 Assets Accounts payable Liabilities and Stockholders' Equity Stockholders' equity: Common stock Retained earnings X Total liabilities and stockholders' equity $ 500,000 136,595 $ $ 47,940 246,400 30,750 396,180 721,270 721,270 $ 84,675 636,595 $ 721,270
Transcribed Image Text:Prepare a balance sheet as of March 31. Current assets: Cash Accounts receivable Inventory Buildings and equipment, net Total current assets Total assets Current liabilities: Hillyard Company Balance Sheet March 31 Assets Accounts payable Liabilities and Stockholders' Equity Stockholders' equity: Common stock Retained earnings X Total liabilities and stockholders' equity $ 500,000 136,595 $ $ 47,940 246,400 30,750 396,180 721,270 721,270 $ 84,675 636,595 $ 721,270
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