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.
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.
Related questions
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.
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 | $ | 60,000 | ||
| Accounts receivable | 216,000 | |||
| Inventory | 60,750 | |||
| Buildings and equipment(net) | 370,000 | |||
| Accounts payable | $ | 91,125 | ||
| Common stock | 500,000 | |||
| Retained earnings | 115,625 | |||
| $ | 706,750 | $ | 706,750 | |
Actual sales for December and budgeted sales for the next fourmonths are as follows:
| December(actual) | $ | 270,000 |
| January | $ | 405,000 |
| February | $ | 602,000 |
| March | $ | 317,000 |
| April | $ | 213,000 |
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,$35,000 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$45,300 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 $3,000 cash. During March, other equipment will be purchasedfor cash at a cost of $80,000.
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 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.
Complete this question by entering your answers in thetabs below.
Required 1
Required 2A
Required 2B
Required 3
Required 4
Required 5
Complete the Schedule of expected cash collections:
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Required 1
Required 2A
Required 2B
Required 3
Required 4
Required 5
Complete the merchandise purchases budget:
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Required 1
Required 2A
Required 2B
Required 3
Required 4
Required 5
Complete the schedule of expected cash disbursements formerchandise purchases.
Required 1 Required 2A Required 2B Required 3 Required 4 Required 5 Complete the cash budget. (Cash deficiency, repayments andinterest should be indicated by a minus sign.)
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