Question

In: Finance

he Statement of Financial Position of Picture This, Inc., a distributor of photographic supplies, as of...

he Statement of Financial Position of Picture This, Inc., a distributor of photographic supplies, as of May 31 is given below:

PICTURE THIS, INC.

Statement of Financial Position

May 31

Assets

                                             Cash 8,000

                                             Accounts receivable 72,000

                                             Inventory 30,000

                                             Building   500,000

                                             Total assets 610,000

Liabilities and Equity

                                             Accounts payable, suppliers 90,000

                                             Notes payable                                                 15,000

                                             Share capital, no par 420,000

                                             Retained earnings   85,000

                                             Total liabilities and equity 610,000

Picture This, Inc. has not budgeted previously, and for this reason it is limiting its master budget planning horizon to just one month ahead – namely, June. The company has assembled the following budgeted data relating to June:

  1. Sales are budgeted at P250,000. Of these sales, P60,000 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected in the month following. All of the May 31 accounts receivable will be collected in June.
  2. Purchases of inventory are expected to total P200,000 during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder is paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
  3. The June 30 inventory balance is budgeted at P40,000.
  4. Operating expenses for June are budgeted at P51,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at P2,000 for the month.
  5. The note payable on the May 31 statement of financial position will be paid during June. The company’s interest expense for June (on all borrowing) will be P500, which will be paid in cash.
  6. New warehouse equipment costing P9,000 will be purchased for cash during June.
  7. During June, the company will borrow P18,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Required:

Prepare a cash budget for June. Support your budget with schedules showing budgeted cash receipts from sales and budgeted cash payments for inventory purchases. Submit your answer in Excel or Word format.

Solutions

Expert Solution


Related Solutions

The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is given below: Snapshot, Inc. Balance Sheet May 31 Assets   Cash $ 6,000         Accounts receivable 90,000         Inventory 38,000         Buildings and equipment, net of depreciation 680,000         Total assets $ 814,000       Liabilities and Stockholders' Equity   Accounts payable $ 81,000         Note payable 33,000         Capital stock 600,000         Retained earnings 100,000         Total liabilities and stockholders' equity $ 814,000       The company...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is given below: Snapshot, Inc. Balance Sheet May 31 Assets   Cash $ 7,000         Accounts receivable 83,000         Inventory 32,000         Buildings and equipment, net of depreciation 610,000         Total assets $ 732,000       Liabilities and Stockholders' Equity   Accounts payable $ 111,000         Note payable 26,000         Capital stock 530,000         Retained earnings 65,000         Total liabilities and stockholders' equity $ 732,000       The company...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is given below: Snapshot, Inc. Balance Sheet May 31 Assets   Cash $ 5,000         Accounts receivable 89,000         Inventory 40,000         Buildings and equipment, net of depreciation 670,000         Total assets $ 804,000       Liabilities and Stockholders' Equity   Accounts payable $ 87,000         Note payable 32,000         Capital stock 590,000         Retained earnings 95,000         Total liabilities and stockholders' equity $ 804,000       The company...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is...
The balance sheet of Snapshot, Inc., a distributor of photographic supplies, as of May 31 is given below: Snapshot, Inc. Balance Sheet May 31 Assets   Cash $ 7,000         Accounts receivable 75,000         Inventory 39,000         Buildings and equipment, net of depreciation 530,000         Total assets $ 651,000       Liabilities and Stockholders' Equity   Accounts payable $ 113,000         Note payable 18,000         Capital stock 450,000         Retained earnings 70,000         Total liabilities and stockholders' equity $ 651,000       The company...
A comparative statement of financial position for Nathalina Industries Inc. follows: NATHALINA INDUSTRIES INC. Statement of...
A comparative statement of financial position for Nathalina Industries Inc. follows: NATHALINA INDUSTRIES INC. Statement of Financial Position December 31, 2020     December 31 Assets 2020 2019 Cash $ 21,000  $ 34,000  Accounts receivable   114,000  54,000  Inventory 220,000  189,000  Land 71,000  110,000  Equipment 240,000  200,000  Accumulated depreciation—equipment   (69,000) (42,000) Total $597,000     $545,000  Liabilities and Shareholders' Equity         Accounts payable. 52,000. 59,000 Long term liabilities 25,000 0 Bonds payable 125,000  200,000  Common shares    204,000  164,000  Retained earnings   191,000 ...
A comparative statement of financial position for Sheffield Industries Inc. follows: SHEFFIELD INDUSTRIES INC. Statement of...
A comparative statement of financial position for Sheffield Industries Inc. follows: SHEFFIELD INDUSTRIES INC. Statement of Financial Position December 31, 2020 December 31 Assets 2020 2019 Cash $22,500 $35,500 Accounts receivable 117,000 55,300 Inventory 231,000 199,000 Land 86,000 130,000 Equipment 278,000 204,000 Accumulated depreciation—equipment (70,500 ) (42,900 )     Total $664,000 $580,900 Liabilities and Shareholders’ Equity Accounts payable $52,700 $60,200 Bonds payable 164,400 218,400 Common shares 234,000 180,000 Retained earnings 212,900 122,300     Total $664,000 $580,900 Additional information: 1. Net...
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                    
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                                                              Liabilities Cash                                      $259,000           Notes Payable 8%             $60,000 Inventory                                $6,000           Accounts Payable              $40,000 Prepaid Insurance                $3,000                      Total                                  $100,000 Supplies                                  $4,000           Common Stock $5 par   $140,000 Land                                       $6,000           Excess of par                      $60,000 Building        $480,000                                  Retained earnings           $418,000 Acc. Depr. ( $40,000)       $440,000                       Total                                    $618,000 Total Assets                         $718,000           Total Liabilities & Equity            $718,000 You are asked to prepare, in good financial form, a set...
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                    
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                                                              Liabilities Cash                                      $259,000           Notes Payable 8%             $60,000 Inventory                                $6,000           Accounts Payable              $40,000 Prepaid Insurance                $3,000                      Total                                  $100,000 Supplies                                  $4,000           Common Stock $5 par   $140,000 Land                                       $6,000           Excess of par                      $60,000 Building        $480,000                                  Retained earnings           $418,000 Acc. Depr. ( $40,000)       $440,000                       Total                                    $618,000 Total Assets                         $718,000           Total Liabilities & Equity            $718,000 You are asked to prepare, in good financial form, a set...
A comparative statement of financial position for Ayayai Corporation follows: AYAYAI CORPORATION Statement of Financial Position...
A comparative statement of financial position for Ayayai Corporation follows: AYAYAI CORPORATION Statement of Financial Position December 31 Assets 2020 2019 Cash $48,100 $21,460 Accounts receivable 64,380 43,660 Inventory 98,420 59,940 FV-OCI investments in shares 46,620 62,160 Land 48,100 76,220 Equipment 288,600 318,200 Accumulated depreciation—equipment (86,580 ) (63,640 ) Goodwill 91,760 128,020         Total $599,400 $646,020 Liabilities and Shareholders’ Equity Accounts payable $8,880 $37,740 Dividends payable 11,100 23,680 Notes payable 162,800 247,900 Common shares 196,100 92,500 Retained earnings 213,120 210,160 Accumulated...
TM Office Supplies, Inc., is a wholesale distributor of office supplies. It sells pencils and pens,...
TM Office Supplies, Inc., is a wholesale distributor of office supplies. It sells pencils and pens, paper goods (including computer paper and forms), staplers, calendars, and other items, excluding furniture and other major items such as copy machines that you would expect to find in an office. Sales have been growing at 5 percent per year during the past several years. Mr. Marina, the president of TM Office Supplies, recently attended a national office supplies convention. In conversations during that...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT