Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

Actual sales for December and budgeted sales for the next four months are as follows:

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.

The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

Monthly expenses are budgeted as follows: salaries and wages, $18,000 per month: advertising, $58,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,580 for the quarter.

Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

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.

During February, the company will purchase a new copy machine for $1,300 cash. During March, other equipment will be purchased for cash at a cost of $71,500.

During January, the company will declare and pay $45,000 in cash dividends.

Management wants to maintain a minimum cash balance of $30,000. 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. 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.

1(a). Schedule of expected cash collections:

1(b). Merchandise purchases budget:

1(c). Schedule of expected cash disbursements for merchandise purchases

Talk about the US Gross domestic product in first quarter of 2019.Why did It drop from 2018 last quarter. Write your normative or value judgement point of view on how the economy seems to be taken.Will we see a turnaround in the upcoming quarters for this year?

Good Kimberly, Now in chapter 7 we talk about coding. What is the coding system that uses all the codes in the CPT and additional codes that cover many supplies, such as sterile trays and durable medical equipment?

Elbert Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $25,830 in the first quarter, and $5,100 increments are expected in the remaining quarters of 2017. Fixed expenses are expected to be $42,100 in each quarter.

Prepare the selling and administrative expense budget by quarters and in total for 2017.

Petesy Corporation is preparing its Master Budget for 2019. Budget information is as follows:

                                                        Sales                      Production Cost                                Operating Expenses

2019               1^st Quarter          P280,000              P192,000                              P64,000

                        2^nd Quarter         320,000               200,000                                  68,000

                        3^rd Quarter          360,000               224,000                                  72,000

                        4^th Quarter          352,000               200,000                                  76,000

2020               1^st Quarter          320,000               224,000                                  72,000

The budgeted Finished Goods Inventories are:

        2018       March 31             P56,000

                        June 30                 52,000

                        September 30      60,000

                        December 31     48,000

The company uses the JIT system on its purchase of materials. It buys materials on cash basis.

Included in the production cost each quarter is P44, 000 in depreciation. The operating expenses include depreciation of P12,000 per quarter. All production costs and operating expenses, with the exemption of depreciation are to be paid during the quarter of incurrence.

Collections on sales are planned at 60% during the quarter of sales, the balance during the quarter following the sale. Dividends of P20,000 is to be paid in June and again in December if covered by sufficient profits. No dividends will be paid if the net profit is less than P120,000.

Income Tax is equal to 32 of the quarter’s income before tax and is paid in the following quarter.

The Statement of Financial Position as of December 31, 2018 is as follows:

                                                                Petesy Corporation

                                                        Statement of Financial Position

                                                                  December 31, 2018

Assets                                                                                                                           Equities

Cash                                              P76,000 Income tax payable        P 12,000

Accounts Receivable              120,000

Inventory                                    44,000                  Share Capital                      640,000

Plant and Equipment              580,000 Retained Earnings            168,000

Total                                              820,000 Total                                      P820,000

1. How much was the actual sales during the last quarter of 2018?
2. What is the total budgeted cost of goods sold for the year 2019?
3. How much dividends will be paid in 2019?
4. What is the total budgeted cash disbursements for production costs and operating expenses for the year 2019?
5. What is the budgeted cash balance on December 31, 2019?
6. What is the expected balance of accounts receivable as of December 31, 2019?
7. What is the budgeted balance of raw materials inventory as of December 31, 2019?
8. What is the expected balance of Income tax payable as of December 31, 2019?
9. What is the budgeted balance of Retained Earnings as of December 31, 2019?
10. What is the expected balance of the plant and equipment account as of December 31, 2019?
11. If a budgeted statement of financial position as at December 31, 2019 is to be prepared, total assets will be how much?

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

Actual sales for December and budgeted sales for the next four months are as follows:

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.

The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

Monthly expenses are budgeted as follows: salaries and wages, $35,000 per month: advertising, $61,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $45,300 for the quarter.

Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

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.

During February, the company will purchase a new copy machine for $3,000 cash. During March, other equipment will be purchased for cash at a cost of $80,000.

During January, the company will declare and pay $45,000 in cash dividends.

Management wants to maintain a minimum cash balance of $30,000. 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. 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 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

Required 3

Required 4

Required 5

Complete the Schedule of expected cash collections:

Required 1

Required 2A

Required 2B

Required 3

Required 4

Required 5

Complete the merchandise purchases budget:

Required 1

Required 2A

Required 2B

Required 3

Required 4

Required 5

Complete the schedule of expected cash disbursements for merchandise purchases.

Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2020 contained the following data.

Actual variable costs were indirect materials $14,800, indirect labor $9,200, utilities $9,300, and maintenance $5,200. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,400. The actual activity level equaled the budgeted level.

All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

(a) Prepare a manufacturing overhead flexible budget report for the first quarter. (List variable costs before fixed costs.)

(b) Prepare a responsibility report for the first quarter.

On May 15, 2018 Phil Brubaker reached a settlement on a long
overdue contract. The settlement results in Phil receiving a
total of $2,000,000 -- scheduled over 5 annual payments of
$400,000 each. The first payment starts on May 15, 2021, with
the remaining 4 payments following on May 15, 2022, May 15,
2023, May 15, 2024, and May 2025.
Phil wants to know the present value of his settlement today on
May 15, 2018, at a 4% interest rate. Show all calculations.

Grant Company leased machinery to Tim Company on July 1, 2015, for a ten-year period expiring June 30, 2025. Equal annual payments under the lease are $150,000 and are due on July 1 of each year. The first payment was made on July 1, 2013. The rate of interest used by Grant and Tim is 9%. The cash selling price of the machinery is $1,050,000 and the cost of the machinery on Grant's accounting records was $930,000. Prepare all of Grant's 2015 journal entries to this lease assuming that it is defined as a sales-type lease.