Question

See last 2 tables

1) budgeted mthly income statements. where i have added comments are the items i need . i have put answers that are not correct for june and total column last 3 items for each column

2) for budgedted balance sheet I have added comments on answer section . I have put answers that are not correct for interest payable and stockholders'equity.  

Developing a Master Budget
for a Merchandising Organization
Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2010.

PEYTON DEPARTMENT STORE Balance Sheet March 31, 2010
Assets		Liabilities and Stockholders' Equity
Cash	$3,000	Accounts payable	$26,000
Accounts receivable	25,000	Dividends payable	17,000
Inventory	30,000	Rent payable	2,000
Prepaid Insurance	2,000	Stockholders' equity	40,000
Fixtures	25,000
Total assets	$85,000	Total liabilities and equity	$85,000

Actual and forecasted sales for selected months in 2010 are as follows:

Month	Sales Revenue
January	$50,000
February	50,000
March	40,000
April	50,000
May	60,000
June	70,000
July	90,000
August	80,000

Monthly operating expenses are as follows:

Wages and salaries	$27,000
Depreciation	100
Utilities	1,000
Rent	2,000

Cash dividends of $17,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $3,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.

(a) Prepare a purchases budget for each month of the second quarter ending June 30, 2010.

Peyton Department Store Monthly Purchase Budget Quarter Ending June 30, 2010
	April	May	June	Total
Budgeted purchases	$Answer	$Answer	$Answer	$Answer

(b) Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2010. Do not include borrowings.

Peyton Department Store Schedule of Monthly Cash Receipts Quarter Ending June 30, 2010
	April	May	June	Total
Total cash receipts	$Answer	$Answer	$Answer	$Answer

(c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2010. Do not include repayments of borrowings.

Peyton Department Store Schedule of Monthly Cash Disbursements Quarter Ending June 30, 2010
	April	May	June	Total
Total cash disbursements	$Answer	$Answer	$Answer	$Answer

(d) Prepare a cash budget for each month of the second quarter ending June 30, 2010. Include budgeted borrowings and repayments.

Only use negative signs, if needed, for: excess receipts over disbursements, balance before borrowings and cash balances (beginning and ending).

Peyton Department Store Monthly Cash Budget Quarter Ending June 30, 2010
	April	May	June	Total
Cash balance, beginning	$Answer	$Answer	$Answer	$Answer
Receipts	Answer	Answer	Answer	Answer
Disbursements	Answer	Answer	Answer	Answer
Excess receipts over disb.	Answer	Answer	Answer	Answer
Balance before borrowings	Answer	Answer	Answer	Answer
Borrowings	Answer	Answer	Answer	Answer
Loan repayments	Answer	Answer	Answer	Answer
Cash balance, ending	$Answer	$Answer	$Answer	$Answer

(e) Prepare an income statement for each month of the second quarter ending June 30, 2010.

Only use negative signs to show net losses in income.

Peyton Department Store Budgeted Monthly Income Statements Quarter Ending June 30, 2010
	April	May	June	Total
Sales	$Answer	$Answer	$Answer	$Answer
Cost of sales	Answer	Answer	Answer	Answer
Gross profit	Answer	Answer	Answer	Answer
Operating expenses:
Wages and salaries	Answer	Answer	Answer	Answer
Depreciation	Answer	Answer	Answer	Answer
Utilities	Answer	Answer	Answer	Answer
Rent	Answer	Answer	Answer	Answer
Insurance	Answer	Answer	Answer	Answer
Interest	Answer	Answer	Answer(not 630)	Answer(not 1,240)
Total expenses	Answer	Answer	Answer(not 31,130)	Answer(not 92,740)
Net income	$Answer	$Answer	$Answer(not 3,870)	$Answer(not 2,740)

(f) Prepare a budgeted balance sheet as of June 30, 2010.

Peyton Department Store Budgeted Balance Sheet June 30, 2010
Assets		Liabilities and Equity
Cash	$Answer	Merchandise payable	$Answer
Accounts receivable	Answer	Dividend payable	Answer
Inventory	Answer	Rent payable	Answer
Prepaid insurance	Answer	Loans payable	Answer
Fixtures	Answer	Interest payable	Answer(not 1,240)
Total assets	$Answer	Stockholders' equity	Answer(not 20,260)
		Total liab. & equity	$Answer(yes 123,500)

Answer 1

d. Cash Budget
		Apr	May	Jun	Total
Beginning Cash Balance		$                         3,000	$            3,000	$                         3,000	$          3,000
Add: Cash Collection		$                      46,000	$          54,000	$                       64,000	$     164,000
Total Cash Available		$                      49,000	$          57,000	$                       67,000	$     167,000
Cash Paid for:
Purchases		$                      26,000	$          31,000	$                       36,000	$        93,000
Wages and Salaries		$                      27,000	$          27,000	$                       27,000	$        81,000
Utilities		$                         1,000	$            1,000	$                         1,000	$          3,000
Rent		$                         2,000	$            2,000	$                         2,000	$          6,000
Insurance		$                               -	$                   -	$                               -	$                -
Dividend		$                      17,000			$        17,000
Total Cash Payment		$                      73,000	$          61,000	$                       66,000	$     200,000
Surplus/Deficit		$                     -24,000	$           -4,000	$                         1,000	$      -33,000
Borrowing		$                      27,000	$            7,000	$                         2,000	$        36,000
Repayment					$                -
Interest payment					$                -
Ending Balance		$                         3,000	$            3,000	$                         3,000	$          3,000
e. Multiple Step Income statement:
		April	May	June	Total
Sales		$                      50,000	$          60,000	$                       70,000	$     180,000
Cost of sales		$                      25,000	$          30,000	$                       35,000	$        90,000
Gross profit		$                      25,000	$          30,000	$                       35,000	$        90,000
Operating expenses:
Wages and salaries		$                      27,000	$          27,000	$                       27,000	$        81,000
Depreciation		$                            100	$               100	$                            100	$             300
Utilities		$                         1,000	$            1,000	$                         1,000	$          3,000
Rent		$                         2,000	$            2,000	$                         2,000	$          6,000
Insurance		$                            400	$               400	$                            400	$          1,200
Interest		$                            270	$               340	$                            360	$             970
Total expenses		$                      30,770	$          30,840	$                       30,860	$        92,470
Net income		$                       -5,770	$              -840	$                         4,140	$        -2,470

Interest payable	$               970
Stockholders' equity	$          20,530
Total liab. & equity	$        123,500