Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for April–July are:
| April | May | June | July | |||||
| Sales | $ | 690,000 | $ | 860,000 | $ | 570,000 | $ | 470,000 |
| Cost of goods sold | 483,000 | 602,000 | 399,000 | 329,000 | ||||
| Gross margin | 207,000 | 258,000 | 171,000 | 141,000 | ||||
| Selling and administrative expenses: | ||||||||
| Selling expense | 87,000 | 106,000 | 68,000 | 47,000 | ||||
| Administrative expense* | 48,500 | 65,600 | 42,200 | 45,000 | ||||
| Total selling and administrative expenses | 135,500 | 171,600 | 110,200 | 92,000 | ||||
| Net operating income | $ | 71,500 | $ | 86,400 | $ | 60,800 | $ | 49,000 |
*Includes $29,000 of depreciation each month.
Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $265,000, and March’s sales totaled $280,000.
Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $126,700.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $96,600.
Dividends of $36,000 will be declared and paid in April.
Land costing $44,000 will be purchased for cash in May.
The cash balance at March 31 is $58,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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, up to a total loan balance of $200,000. 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:
1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
2. Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
3. Prepare a cash budget for April, May, and June as well as in total for the quarter.
In: Accounting
Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for April–July are:
| April | May | June | July | |||||||||
| Sales | $ | 690,000 | $ | 860,000 | $ | 570,000 | $ | 470,000 | ||||
| Cost of goods sold | 483,000 | 602,000 | 399,000 | 329,000 | ||||||||
| Gross margin | 207,000 | 258,000 | 171,000 | 141,000 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling expense | 87,000 | 106,000 | 68,000 | 47,000 | ||||||||
| Administrative expense* | 48,500 | 65,600 | 42,200 | 45,000 | ||||||||
| Total selling and administrative expenses | 135,500 | 171,600 | 110,200 | 92,000 | ||||||||
| Net operating income | $ | 71,500 | $ | 86,400 | $ | 60,800 | $ | 49,000 | ||||
*Includes $29,000 of depreciation each month.
Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $265,000, and March’s sales totaled $280,000.
Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $126,700.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $96,600.
Dividends of $36,000 will be declared and paid in April.
Land costing $44,000 will be purchased for cash in May.
The cash balance at March 31 is $58,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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, up to a total loan balance of $200,000. 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:
1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
2. Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
3. Prepare a cash budget for April, May, and June as well as in total for the quarter. (Cash deficiency, repayments and interest should be indicated by a minus sign.)
In: Accounting
Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for April–July are:
| April | May | June | July | |||||
| Sales | $ | 770,000 | $ | 930,000 | $ | 630,000 | $ | 540,000 |
| Cost of goods sold | 539,000 | 651,000 | 441,000 | 378,000 | ||||
| Gross margin | 231,000 | 279,000 | 189,000 | 162,000 | ||||
| Selling and administrative expenses: | ||||||||
| Selling expense | 93,000 | 112,000 | 74,000 | 54,000 | ||||
| Administrative expense* | 51,500 | 70,400 | 45,800 | 51,000 | ||||
| Total selling and administrative expenses | 144,500 | 182,400 | 119,800 | 105,000 | ||||
| Net operating income | $ | 86,500 | $ | 96,600 | $ | 69,200 | $ | 57,000 |
*Includes $35,000 of depreciation each month.
Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $295,000, and March’s sales totaled $310,000.
Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $140,700.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $107,800.
Dividends of $42,000 will be declared and paid in April.
Land costing $50,000 will be purchased for cash in May.
The cash balance at March 31 is $64,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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, up to a total loan balance of $200,000. 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:
1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
2. Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
3. Prepare a cash budget for April, May, and June as well as in total for the quarter.
In: Accounting
Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: Budgeted monthly absorption costing income statements for April–July are: April May June July Sales $ 610,000 $ 800,000 $ 510,000 $ 410,000 Cost of goods sold 427,000 560,000 357,000 287,000 Gross margin 183,000 240,000 153,000 123,000 Selling and administrative expenses: Selling expense 81,000 100,000 61,000 41,000 Administrative expense* 45,500 60,800 38,000 39,000 Total selling and administrative expenses 126,500 160,800 99,000 80,000 Net operating income $ 56,500 $ 79,200 $ 54,000 $ 43,000 *Includes $23,000 of depreciation each month. Sales are 20% for cash and 80% on account. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $220,000, and March’s sales totaled $250,000. Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $112,700. Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $85,400. Dividends of $30,000 will be declared and paid in April. Land costing $38,000 will be purchased for cash in May. The cash balance at March 31 is $52,000; the company must maintain a cash balance of at least $40,000 at the end of each month. 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, up to a total loan balance of $200,000. 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: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise inventory: a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter.
In: Accounting
Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for April–July are:
| April | May | June | July | |||||
| Sales | $ | 600,000 | $ | 900,000 | $ | 500,000 | $ | 400,000 |
| Cost of goods sold | 420,000 | 630,000 | 350,000 | 280,000 | ||||
| Gross margin | 180,000 | 270,000 | 150,000 | 120,000 | ||||
| Selling and administrative expenses: | ||||||||
| Selling expense | 79,000 | 120,000 | 62,000 | 51,000 | ||||
| Administrative expense* | 45,000 | 52,000 | 41,000 | 38,000 | ||||
| Total selling and administrative expenses | 124,000 | 172,000 | 103,000 | 89,000 | ||||
| Net operating income | $ | 56,000 | $ | 98,000 | $ | 47,000 | $ | 31,000 |
*Includes $20,000 of depreciation each month.
Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $200,000, and March’s sales totaled $300,000.
Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $126,000.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $84,000.
Dividends of $49,000 will be declared and paid in April.
Land costing $16,000 will be purchased for cash in May.
The cash balance at March 31 is $52,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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, up to a total loan balance of $200,000. 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:
1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
2. Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
3. Prepare a cash budget for April, May, and June as well as in total for the quarter.
In: Accounting
Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for April–July are:
| April | May | June | July | |||||
| Sales | $ | 660,000 | $ | 830,000 | $ | 540,000 | $ | 440,000 |
| Cost of goods sold | 462,000 | 581,000 | 378,000 | 308,000 | ||||
| Gross margin | 198,000 | 249,000 | 162,000 | 132,000 | ||||
| Selling and administrative expenses: | ||||||||
| Selling expense | 84,000 | 103,000 | 65,000 | 44,000 | ||||
| Administrative expense* | 47,000 | 63,200 | 39,800 | 42,000 | ||||
| Total selling and administrative expenses | 131,000 | 166,200 | 104,800 | 86,000 | ||||
| Net operating income | $ | 67,000 | $ | 82,800 | $ | 57,200 | $ | 46,000 |
*Includes $26,000 of depreciation each month.
Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $250,000, and March’s sales totaled $265,000.
Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $120,400.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $92,400.
Dividends of $33,000 will be declared and paid in April.
Land costing $41,000 will be purchased for cash in May.
The cash balance at March 31 is $55,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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, up to a total loan balance of $200,000. 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:
1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
2. Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
3. Prepare a cash budget for April, May, and June as well as in total for the quarter.
In: Accounting
Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:
Budgeted monthly absorption costing income statements for April–July are:
| April | May | June | July | |||||
| Sales | $ | 540,000 | $ | 740,000 | $ | 440,000 | $ | 340,000 |
| Cost of goods sold | 378,000 | 518,000 | 308,000 | 238,000 | ||||
| Gross margin | 162,000 | 222,000 | 132,000 | 102,000 | ||||
| Selling and administrative expenses: | ||||||||
| Selling expense | 74,000 | 94,000 | 55,000 | 34,000 | ||||
| Administrative expense* | 42,000 | 56,000 | 34,400 | 32,000 | ||||
| Total selling and administrative expenses | 116,000 | 150,000 | 89,400 | 66,000 | ||||
| Net operating income | $ | 46,000 | $ | 72,000 | $ | 42,600 | $ | 36,000 |
*Includes $16,000 of depreciation each month.
Sales are 20% for cash and 80% on account.
Sales on account are collected over a three-month period with 10% collected in the month of sale; 80% collected in the first month following the month of sale; and the remaining 10% collected in the second month following the month of sale. February’s sales totaled $160,000, and March’s sales totaled $220,000.
Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $99,400.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $75,600.
Dividends of $24,000 will be declared and paid in April.
Land costing $32,000 will be purchased for cash in May.
The cash balance at March 31 is $46,000; the company must maintain a cash balance of at least $40,000 at the end of each month.
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, up to a total loan balance of $200,000. 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:
1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.
2. Prepare the following for merchandise inventory:
a. A merchandise purchases budget for April, May, and June.
b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.
3. Prepare a cash budget for April, May, and June as well as in total for the quarter.
In: Accounting
The Good Life Insurance Co. wants to sell you an annuity which will pay you $650 per quarter for 20 years. You want to earn a minimum rate of return of 5.0 percent. What is the most you are willing to pay as a lump sum today to buy this annuity?
In: Finance
18) A firm's balance sheet shows the following changes over the most recent quarter: Cash increases by $1,000,000, long-term assets increase by $3,000,000, accounts payable increase by $750,000, long-term-debt increases by $1,000,000, retained earnings increase by $1,250,000, and new equity increases by $1,000,000. Which of the following statements must be TRUE?
A) Cash was a $1,000,000 source of funds for the firm.
B) Long-term debt was a $1,000,000 source of funds for the firm.
C) Because retained earnings increased by more than $500,000, the firm could not have realized a profit for the quarter.
D) All of the new equity must have been provided by investors who were not shareholders prior to the issuance of new equity.
19) A firm's balance sheet shows the following changes over the most recent quarter: Cash increases by $1,000,000, long-term assets increase by $3,000,000, accounts payable increase by $750,000, long-term-debt increases by $1,000,000, retained earnings increase by $1,250,000, and new equity increases by $1,000,000. Which of the following statements must be FALSE?
A) Cash was a $1,000,000 source of funds for the firm.
B) Long-term debt was a $1,000,000 source of funds for the firm.
C) The purchase of long-term assets was a use of funds by the firm.
D) Retained earnings are considered an INTERNAL source of financing.
20) A firm has a net income (after-tax profit) of $500,000 and pays dividends of $150,000. Which of the following statements is TRUE?
A) Cash decreased by $150,000
B) Retained earnings increased by $350,000
C) Long-term debt increased by $350,000
D) All of the statements are true.
In: Finance
Bryant Corporation has provided the following information for the most recent quarter, July 1 through September 30 of 2020. Prepare a multiple-step Income Statement and the Asset section of a classified Balance Sheet, including the correct headings.
|
Specific Account |
Balance |
Specific Account |
Balance |
|
Accounts Payable |
$30 |
Insurance Payable |
$1 |
|
Accounts Receivable |
136 |
Interest Expense |
17 |
|
Accumulated Depreciation (Buildings) |
30 |
Interest Payable |
4 |
|
Accumulated Depreciation (Equipment) |
7 |
Inventory |
75 |
|
Allowance for Doubtful Accounts |
13 |
Land |
145 |
|
Bad Debt Expense |
4 |
Notes Payable (maturity of less than 1 yr) |
40 |
|
Bank Fees Expense |
1 |
Notes Payable (maturity of more than 1 yr) |
55 |
|
Buildings |
170 |
Retained Earnings (beginning) |
120 |
|
Cash |
125 |
Sales Discounts |
15 |
|
Common Stock |
204 |
Sales Returns & Allowances |
5 |
|
Cost of Goods Sold |
375 |
Sales Revenue |
750 |
|
Depreciation Expense |
14 |
Supplies |
6 |
|
Dividends |
17 |
Supplies Expense |
12 |
|
Equipment |
90 |
Unearned Sales Revenue |
27 |
|
Freight-Out |
3 |
Wages Expense |
24 |
|
Gain on Sale of PPE |
9 |
Wages Payable |
31 |
|
Income Tax Expense |
87 |
In: Accounting