Peyton Department Store prepares budgets quarterly. Thefollowing information is available for use in planning the secondquarter budgets for 2014.
PEYTON DEPARTMENTSTORE
Balance Sheet
March 31, 2014 Assets Liabilities andStockholders' 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 2014 are asfollows:
Month Sales Revenue January $ 60,000 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 $ 25,000 Depreciation 100 Utilities 1,000 Rent 2,000
Cash dividends of $17,000 are declared during the third month ofeach quarter and are paid during the first month of the followingquarter. Operating expenses, except insurance, rent, anddepreciation are paid as incurred. Rent is paid during thefollowing month. The prepaid insurance is for five more months.Cost of goods sold is equal to 50 percent of sales. Endinginventories are sufficient for 120 percent of the next month'ssales. Purchases during any given month are paid in full during thefollowing month. All sales are on account, with 50 percentcollected during the month of sale, 40 percent during the nextmonth, and 10 percent during the month thereafter. Money can beborrowed and repaid in multiples of $1,000 at an interest rate of12 percent per year. The company desires a minimum cash balance of$3,000 on the first of each month. At the time the principal isrepaid, interest is paid on the portion of principal that isrepaid. All borrowing is at the beginning of the month, and allrepayment is at the end of the month. Money is never repaid at theend of the month it is borrowed.
(a) Prepare a purchases budget for each month of the secondquarter ending June 30, 2014.
Peyton DepartmentStore
Monthly Purchase Budget
Quarter Ending June 30, 2014 April May June Total Budgeted purchases $Answer $Answer $Answer $Answer
(b) Prepare a cash receipts schedule for each month of thesecond quarter ending June 30, 2014. Do not include borrowings.
Peyton DepartmentStore
Schedule of Monthly Cash Receipts
Quarter Ending June 30, 2014 April May June Total Total cash receipts $Answer $Answer $Answer $Answer
(c) Prepare a cash disbursements schedule for each month of thesecond quarter ending June 30, 2014. Do not include repayments ofborrowings.
Peyton DepartmentStore
Schedule of Monthly Cash Disbursements
Quarter Ending June 30, 2014 April May June Total Total cash disbursements $Answer $Answer $Answer $Answer
(d) Prepare a cash budget for each month of the second quarterending June 30, 2014. Include budgeted borrowings andrepayments.
Only use negative signs, if needed, for: excess receiptsover disbursements, balance before borrowings and cash balances(beginning and ending).
Peyton Department
Store Monthly Cash Budget
Quarter Ending June 30, 2014 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 secondquarter ending June 30, 2014.
Only use negative signs to show net losses forincome.
Peyton DepartmentStore
Budgeted Monthly Income Statements
Quarter Ending June 30, 2014 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 Answer Total expenses Answer Answer Answer Answer Net income $Answer $Answer $Answer $Answer
(f) Prepare a budgeted balance sheet as of June 30, 2014.
Peyton DepartmentStore
Budgeted Balance Sheet
June 30, 2014 Assets Liabilities andEquity 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 Total assets $Answer Stockholders' equity Answer Total liab. & equity $Answer
Peyton Department Store prepares budgets quarterly. Thefollowing information is available for use in planning the secondquarter budgets for 2014.
PEYTON DEPARTMENTSTORE Balance Sheet March 31, 2014 | |||
---|---|---|---|
Assets | Liabilities andStockholders' 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 2014 are asfollows:
Month | Sales Revenue |
---|---|
January | $ 60,000 |
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 | $ 25,000 |
Depreciation | 100 |
Utilities | 1,000 |
Rent | 2,000 |
Cash dividends of $17,000 are declared during the third month ofeach quarter and are paid during the first month of the followingquarter. Operating expenses, except insurance, rent, anddepreciation are paid as incurred. Rent is paid during thefollowing month. The prepaid insurance is for five more months.Cost of goods sold is equal to 50 percent of sales. Endinginventories are sufficient for 120 percent of the next month'ssales. Purchases during any given month are paid in full during thefollowing month. All sales are on account, with 50 percentcollected during the month of sale, 40 percent during the nextmonth, and 10 percent during the month thereafter. Money can beborrowed and repaid in multiples of $1,000 at an interest rate of12 percent per year. The company desires a minimum cash balance of$3,000 on the first of each month. At the time the principal isrepaid, interest is paid on the portion of principal that isrepaid. All borrowing is at the beginning of the month, and allrepayment is at the end of the month. Money is never repaid at theend of the month it is borrowed.
(a) Prepare a purchases budget for each month of the secondquarter ending June 30, 2014.
Peyton DepartmentStore Monthly Purchase Budget Quarter Ending June 30, 2014 | ||||
---|---|---|---|---|
April | May | June | Total | |
Budgeted purchases | $Answer | $Answer | $Answer | $Answer |
(b) Prepare a cash receipts schedule for each month of thesecond quarter ending June 30, 2014. Do not include borrowings.
Peyton DepartmentStore Schedule of Monthly Cash Receipts Quarter Ending June 30, 2014 | ||||
---|---|---|---|---|
April | May | June | Total | |
Total cash receipts | $Answer | $Answer | $Answer | $Answer |
(c) Prepare a cash disbursements schedule for each month of thesecond quarter ending June 30, 2014. Do not include repayments ofborrowings.
Peyton DepartmentStore Schedule of Monthly Cash Disbursements Quarter Ending June 30, 2014 | ||||
---|---|---|---|---|
April | May | June | Total | |
Total cash disbursements | $Answer | $Answer | $Answer | $Answer |
(d) Prepare a cash budget for each month of the second quarterending June 30, 2014. Include budgeted borrowings andrepayments.
Only use negative signs, if needed, for: excess receiptsover disbursements, balance before borrowings and cash balances(beginning and ending).
Peyton Department Store Monthly Cash Budget Quarter Ending June 30, 2014 | ||||
---|---|---|---|---|
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 secondquarter ending June 30, 2014.
Only use negative signs to show net losses forincome.
Peyton DepartmentStore Budgeted Monthly Income Statements Quarter Ending June 30, 2014 | ||||
---|---|---|---|---|
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 | Answer |
Total expenses | Answer | Answer | Answer | Answer |
Net income | $Answer | $Answer | $Answer | $Answer |
(f) Prepare a budgeted balance sheet as of June 30, 2014.
Peyton DepartmentStore Budgeted Balance Sheet June 30, 2014 | |||
---|---|---|---|
Assets | Liabilities andEquity | ||
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 |
Total assets | $Answer | Stockholders' equity | Answer |
Total liab. & equity | $Answer |