Hillyard Company, an office supplies specialty store, preparesits master budget on a quarterly basis. The following data havebeen assembled to assist in preparing the master budget for thefirst quarter: As of December 31 (the end of the prior quarter),the companyâs general ledger showed the following account balances:Cash $ 51,000 Accounts receivable 208,800 Inventory 59,400Buildings and equipment (net) 361,000 Accounts payable $ 88,425Common stock 500,000 Retained earnings 91,775 $ 680,200 $ 680,200Actual sales for December and budgeted sales for the next fourmonths are as follows: December(actual) $ 261,000 January $ 396,000February $ 593,000 March $ 307,000 April $ 204,000 Sales are 20%for cash and 80% on credit. All payments on credit sales arecollected in the month following sale. The accounts receivable atDecember 31 are a result of December credit sales. The companyâsgross margin is 40% of sales. (In other words, cost of goods soldis 60% of sales.) Monthly expenses are budgeted as follows:salaries and wages, $26,000 per month: advertising, $66,000 permonth; shipping, 5% of sales; other expenses, 3% of sales.Depreciation, including depreciation on new assets acquired duringthe quarter, will be $43,860 for the quarter. Each monthâs endinginventory should equal 25% of the following monthâs cost of goodssold. One-half of a monthâs inventory purchases is paid for in themonth of purchase; the other half is paid in the following month.During February, the company will purchase a new copy machine for$2,100 cash. During March, other equipment will be purchased forcash at a cost of $75,500. During January, the company will declareand pay $45,000 in cash dividends. Management wants to maintain aminimum cash balance of $30,000. The company has an agreement witha local bank that allows the company to borrow in increments of$1,000 at the beginning of each month. The interest rate on theseloans is 1% per month and for simplicity we will assume thatinterest is not compounded. The company would, as far as it isable, repay the loan plus accumulated interest at the end of thequarter. Required: Using the data above, complete the followingstatements and schedules for the first quarter: 1. Schedule ofexpected 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 statementfor the quarter ending March 31. 5. Prepare a balance sheet as ofMarch 31.
Hillyard Company, an office supplies specialty store, preparesits master budget on a quarterly basis. The following data havebeen assembled to assist in preparing the master budget for thefirst quarter: As of December 31 (the end of the prior quarter),the companyâs general ledger showed the following account balances:Cash $ 51,000 Accounts receivable 208,800 Inventory 59,400Buildings and equipment (net) 361,000 Accounts payable $ 88,425Common stock 500,000 Retained earnings 91,775 $ 680,200 $ 680,200Actual sales for December and budgeted sales for the next fourmonths are as follows: December(actual) $ 261,000 January $ 396,000February $ 593,000 March $ 307,000 April $ 204,000 Sales are 20%for cash and 80% on credit. All payments on credit sales arecollected in the month following sale. The accounts receivable atDecember 31 are a result of December credit sales. The companyâsgross margin is 40% of sales. (In other words, cost of goods soldis 60% of sales.) Monthly expenses are budgeted as follows:salaries and wages, $26,000 per month: advertising, $66,000 permonth; shipping, 5% of sales; other expenses, 3% of sales.Depreciation, including depreciation on new assets acquired duringthe quarter, will be $43,860 for the quarter. Each monthâs endinginventory should equal 25% of the following monthâs cost of goodssold. One-half of a monthâs inventory purchases is paid for in themonth of purchase; the other half is paid in the following month.During February, the company will purchase a new copy machine for$2,100 cash. During March, other equipment will be purchased forcash at a cost of $75,500. During January, the company will declareand pay $45,000 in cash dividends. Management wants to maintain aminimum cash balance of $30,000. The company has an agreement witha local bank that allows the company to borrow in increments of$1,000 at the beginning of each month. The interest rate on theseloans is 1% per month and for simplicity we will assume thatinterest is not compounded. The company would, as far as it isable, repay the loan plus accumulated interest at the end of thequarter. Required: Using the data above, complete the followingstatements and schedules for the first quarter: 1. Schedule ofexpected 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 statementfor the quarter ending March 31. 5. Prepare a balance sheet as ofMarch 31.
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Hillyard Company, an office supplies specialty store, preparesits master budget on a quarterly basis. The following data havebeen assembled to assist in preparing the master budget for thefirst quarter:
As of December 31 (the end of the prior quarter), the companyâsgeneral ledger showed the following account balances:
| Cash | $ | 53,000 | ||
| Accounts receivable | 210,400 | |||
| Inventory | 59,700 | |||
| Buildings and equipment(net) | 363,000 | |||
| Accounts payable | $ | 89,025 | ||
| Common stock | 500,000 | |||
| Retained earnings | 97,075 | |||
| $ | 686,100 | $ | 686,100 | |
Actual sales for December and budgeted sales for the next fourmonths are as follows:
| December(actual) | $ | 263,000 |
| January | $ | 398,000 |
| February | $ | 595,000 |
| March | $ | 309,000 |
| April | $ | 206,000 |
Sales are 20% for cash and 80% on credit. All payments on creditsales are collected in the month following sale. The accountsreceivable at December 31 are a result of December creditsales.
The companyâs 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,$28,000 per month: advertising, $68,000 per month; shipping, 5% ofsales; other expenses, 3% of sales. Depreciation, includingdepreciation on new assets acquired during the quarter, will be$44,180 for the quarter.
Each monthâs ending inventory should equal 25% of the followingmonthâs cost of goods sold.
One-half of a monthâs inventory purchases is paid for in themonth of purchase; the other half is paid in the followingmonth.
During February, the company will purchase a new copy machinefor $2,300 cash. During March, other equipment will be purchasedfor cash at a cost of $76,500.
During January, the company will declare and pay $45,000 in cashdividends.
Management wants to maintain a minimum cash balance of $30,000.The company has an agreement with a local bank that allows thecompany to borrow in increments of $1,000 at the beginning of eachmonth. The interest rate on these loans is 1% per month and forsimplicity we will assume that interest is not compounded. Thecompany would, as far as it is able, repay the loan plusaccumulated interest at the end of the quarter.
Required:
Using the data above, complete the following statements andschedules for the first quarter:
1. Schedule of expected cash collections:
2-a. Merchandise purchases budget:
2-b. Schedule of expected cash disbursements for merchandisepurchases:
3. Cash budget:
4. Prepare an absorption costing income statement for thequarter ending March 31.
5. Prepare a balance sheet as of March 31.
I need help with solving the last part of this 5 part problem. Ihaved for everything else, however, retained earnings is coming upas incorrect:
Hillyard Company, an office supplies specialty store, preparesits master budget on a quarterly basis. The following data havebeen assembled to assist in preparing the master budget for thefirst quarter:
As of December 31 (the end of the prior quarter), the companyâsgeneral ledger showed the following account balances:
Cash | $ | 46,000 | ||
Accounts receivable | 204,800 | |||
Inventory | 58,650 | |||
Buildings and equipment (net) | 356,000 | |||
Accounts payable | $ | 86,925 | ||
Common stock | 500,000 | |||
Retained earnings | 78,525 | |||
$ | 665,450 | $ | 665,450 |
Actual sales for December and budgeted sales for the next fourmonths are as follows:
December(actual) | $ | 256,000 |
January | $ | 391,000 |
February | $ | 588,000 |
March | $ | 302,000 |
April | $ | 199,000 |
Sales are 20% for cash and 80% on credit. All payments on creditsales are collected in the month following sale. The accountsreceivable at December 31 are a result of December creditsales.
The companyâs 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,$21,000 per month: advertising, $61,000 per month; shipping, 5% ofsales; other expenses, 3% of sales. Depreciation, includingdepreciation on new assets acquired during the quarter, will be$43,060 for the quarter.
Each monthâs ending inventory should equal 25% of the followingmonthâs cost of goods sold.
One-half of a monthâs inventory purchases is paid for in themonth of purchase; the other half is paid in the followingmonth.
During February, the company will purchase a new copy machinefor $1,600 cash. During March, other equipment will be purchasedfor cash at a cost of $73,000.
During January, the company will declare and pay $45,000 in cashdividends.
Management wants to maintain a minimum cash balance of $30,000.The company has an agreement with a local bank that allows thecompany to borrow in increments of $1,000 at the beginning of eachmonth. The interest rate on these loans is 1% per month and forsimplicity we will assume that interest is not compounded. Thecompany would, as far as it is able, repay the loan plusaccumulated interest at the end of the quarter.
Required:
Using the data above, complete thefollowing statements and schedules for the first quarter:
1. Schedule of expected cashcollections:
2-a. Merchandise purchasesbudget:
2-b. Schedule of expected cashdisbursements for merchandise purchases:
3. Cash budget:
4. Prepare an absorption costingincome statement for the quarter ending March 31.
5. Prepare a balance sheet as ofMarch 31.
4.
5.
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 companyâs general ledger showed the following account balances:
| Debit | Credit | ||||||
| Cash | $ | 52,000 | |||||
| Accounts receivable | 209,600 | ||||||
| Inventory | 59,550 | ||||||
| Buildings and equipment (net) | 362,000 | ||||||
| Accounts payable | $ | 88,725 | |||||
| Common stock | 500,000 | ||||||
| Retained earnings | 94,425 | ||||||
| $ | 683,150 | $ | 683,150 | ||||
Actual sales for December and budgeted sales for the next four months are as follows:
| December(actual) | $ | 262,000 | |
| January | $ | 397,000 | |
| February | $ | 594,000 | |
| March | $ | 308,000 | |
| April | $ | 205,000 | |
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 companyâs 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, $27,000 per month: advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 for the quarter.
Each monthâs ending inventory should equal 25% of the following monthâs cost of goods sold.
One-half of a monthâs 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 $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000.
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:
*$397,000 sales à 60% cost ratio = $238,200.
â $356,400 Ã 25% = $89,100.
2-b. Schedule of expected cash disbursements for merchandise purchases:
3. Cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.)
4. Prepare an absorption costing income statement for the quarter ending March 31.
5. Prepare a balance sheet as of March 31.
