Question

In: Accounting

Part 2 Consider the budgeted income statement for Happy Turtles for the month ended 30 June...

Part 2

Consider the budgeted income statement for Happy Turtles for the month ended 30 June 2017 below:-

                                                     

$                    

$

Sales                                              

Less:   Cost of Goods Sold

                           

290,000

            Inventory, 31 May 2017

50,000

            Purchases                         

              192,000

            Available for sale             

              242,000

            Inventory, 30 June 2017

(40,000)

                                                     

                           

202,000

Gross profit                                   

                           

88,000

Less:   Operating expenses

                   Wages                                                                                        36,000

                   Utilities                                                                          5,000

                   Advertising                                                                                10,000

                   Depreciation                                                                                1,000

                   Office expenses                                                            4,000

                   Insurance and property taxes                                                    3,000                (59,000)

       Operating profit                                                                                                                                 29,000

                                                                                                                                       =====

Additional information:

  • The cash balance on 31 May 2017 $15,000.
  • Sales proceeds are collected as follows: 80% the month of sale; 10% the second month; and 10% the third month; explain what % will be use and why the other % will not be use.
  • Accounts receivable are $ 44,000 on 31 May 2017 consisting of $ 20,000 from April 2017 sales and $24,000 from May 2017 sales, show the calculation and write process of getting the answer.
  • Accounts payable on 31 May 2017 are $ 145,000.
  • Happy Turtles pay 25% of purchases during the month of purchase and the remainder during the following month, what is the month of purchase, specify your answers.
  • All operating expenses requiring cash are paid during the month of recognition, except that insurance and property taxes are paid annually in December for the forthcoming year.
  • do we put amortization on the cash budget, write the reason.

Required:

Prepare a cash budget for June 2017. Confine your analysis to the given data. Ignore income taxes.

Solutions

Expert Solution

The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation and formulas and format. For detailed answers refer to the supporting sheets.

ekkarill92 answered 5 months ago
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