Solomon Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2019. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks:
October sales are estimated to be $310,000, of which 45 percentwill be cash and 55 percent will be credit. The company expectssales to increase at the rate of 20 percent per month. Prepare asales budget.
The company expects to collect 100 percent of the accountsreceivable generated by credit sales in the month following thesale. Prepare a schedule of cash receipts.
The cost of goods sold is 70 percent of sales. The companydesires to maintain a minimum ending inventory equal to 20 percentof the next monthâs cost of goods sold. However, ending inventoryof December is expected to be $13,300. Assume that all purchasesare made on account. Prepare an inventory purchases budget.
The company pays 80 percent of accounts payable in the month ofpurchase and the remaining 20 percent in the following month.Prepare a cash payments budget for inventory purchases.
Budgeted selling and administrative expenses per monthfollow:
Salary expense (fixed) $ 19,300 Sales commissions 4 % of Sales Supplies expense 2 % of Sales Utilities (fixed) $ 2,700 Depreciation on store fixtures(fixed)* $ 5,300 Rent (fixed) $ 6,100 Miscellaneous (fixed) $ 2,500
*The capital expenditures budget indicates that Solomon willspend $160,200 on October 1 for store fixtures, which are expectedto have a $33,000 salvage value and a two-year (24-month) usefullife.
Prepare a pro forma balance sheet at the end of the quarter.(Amounts to be deducted should be indicated by a minus sign.)
SOLOMON COMPANY Pro Forma Balance Sheet December 31, 2019 Assets Cash Accounts receivable Inventory Store fixtures Less: Accumulated depreciation Book value of fixtures 0 Total assets $0 Liabilities Accounts payable Line of credit liability Utilities payable Sales commissions payable 0 Equity Retained earnings 0 Total liabilities andequity $0
Prepare a pro forma income statement for the quarter.
Prepare a pro forma balance sheet at the end of the quarter.
Prepare a pro forma statement of cash flows for the quarter.
Prepare a pro forma statement of cash flows for the quarter.(Amounts to be deducted should be indicated by a minus sign.)
SOLOMON COMPANY Pro Forma Statement of Cash Flows For the Quarter Ended December 31, 2019 Cash flows from operatingactivities Cash payments for inventory Cash payments for selling and administrative expenses Cash payments for interest expense Cash receipts from customers Net cash flows from operatingactivities $0 Cash flows from investingactivities Cash payment for store fixtures Cash flow from financingactivities Net inflow from line of credit Net increase in cash Plus: Beginning cash balance Ending cash balance $0
Solomon Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2019. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks:
October sales are estimated to be $310,000, of which 45 percentwill be cash and 55 percent will be credit. The company expectssales to increase at the rate of 20 percent per month. Prepare asales budget.
The company expects to collect 100 percent of the accountsreceivable generated by credit sales in the month following thesale. Prepare a schedule of cash receipts.
The cost of goods sold is 70 percent of sales. The companydesires to maintain a minimum ending inventory equal to 20 percentof the next monthâs cost of goods sold. However, ending inventoryof December is expected to be $13,300. Assume that all purchasesare made on account. Prepare an inventory purchases budget.
The company pays 80 percent of accounts payable in the month ofpurchase and the remaining 20 percent in the following month.Prepare a cash payments budget for inventory purchases.
Budgeted selling and administrative expenses per monthfollow:
| Salary expense (fixed) | $ | 19,300 | |
| Sales commissions | 4 | % of Sales | |
| Supplies expense | 2 | % of Sales | |
| Utilities (fixed) | $ | 2,700 | |
| Depreciation on store fixtures(fixed)* | $ | 5,300 | |
| Rent (fixed) | $ | 6,100 | |
| Miscellaneous (fixed) | $ | 2,500 | |
*The capital expenditures budget indicates that Solomon willspend $160,200 on October 1 for store fixtures, which are expectedto have a $33,000 salvage value and a two-year (24-month) usefullife.
Prepare a pro forma balance sheet at the end of the quarter.(Amounts to be deducted should be indicated by a minus sign.)
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Prepare a pro forma income statement for the quarter.
Prepare a pro forma balance sheet at the end of the quarter.
Prepare a pro forma statement of cash flows for the quarter.
Prepare a pro forma statement of cash flows for the quarter.(Amounts to be deducted should be indicated by a minus sign.)
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Related questions
Thornton Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2019. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks:
Required
October sales are estimated to be $400,000, of which 40 percentwill be cash and 60 percent will be credit. The company expectssales to increase at the rate of 30 percent per month. Prepare asales budget.
The company expects to collect 100 percent of the accountsreceivable generated by credit sales in the month following thesale. Prepare a schedule of cash receipts.
The cost of goods sold is 70 percent of sales. The companydesires to maintain a minimum ending inventory equal to 20 percentof the next monthâs cost of goods sold. However, ending inventoryof December is expected to be $13,500. Assume that all purchasesare made on account. Prepare an inventory purchases budget.
The company pays 70 percent of accounts payable in the month ofpurchase and the remaining 30 percent in the following month.Prepare a cash payments budget for inventory purchases.
Budgeted selling and administrative expenses per monthfollow:
| Salary expense (fixed) | $ | 19,500 | |
| Sales commissions | 4 | % of Sales | |
| Supplies expense | 2 | % of Sales | |
| Utilities (fixed) | $ | 2,900 | |
| Depreciation on store fixtures(fixed)* | $ | 5,500 | |
| Rent (fixed) | $ | 6,300 | |
| Miscellaneous (fixed) | $ | 2,700 | |
*The capital expenditures budget indicates that Thornton willspend $167,000 on October 1 for store fixtures, which are expectedto have a $35,000 salvage value and a two-year (24-month) usefullife.
Use this information to prepare a selling and administrativeexpenses budget.
Utilities and sales commissions are paid the month after theyare incurred; all other expenses are paid in the month in whichthey are incurred. Prepare a cash payments budget for selling andadministrative expenses.
Thornton borrows funds, in increments of $1,000, and repays themon the last day of the month. Repayments may be made in any amountavailable. The company also pays its vendors on the last day of themonth. It pays interest of 2 percent per month in cash on the lastday of the month. To be prudent, the company desires to maintain a$27,000 cash cushion. Prepare a cash budget.
Thornton Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2019. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks:
Prepare a pro forma income statement for the quarter.
Prepare a pro forma balance sheet at the end of the quarter.
Prepare a pro forma statement of cash flows for the quarter.
Camden Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2019. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks:
Required
October sales are estimated to be $125,000, of which 40 percentwill be cash and 60 percent will be credit. The company expectssales to increase at the rate of 8 percent per month. Prepare asales budget.
The company expects to collect 100 percent of the accountsreceivable generated by credit sales in the month following thesale. Prepare a schedule of cash receipts.
The cost of goods sold is 60 percent of sales. The companydesires to maintain a minimum ending inventory equal to 10 percentof the next monthâs cost of goods sold. However, ending inventoryof December is expected to be $6,000. Assume that all purchases aremade on the account. Prepare an inventory purchases budget.
The company pays 70 percent of accounts payable in the month ofpurchase and the remaining 30 percent in the following month.Prepare a cash payments budget for inventory purchases.
Budgeted selling and administrative expenses per monthfollow:
| Salary expense(fixed) | $ | 9,000 | |
| Sales commissions | 5 | % of Sales | |
| Supplies Expense | 2 | % of Sales | |
| Utilities (fixed) | $ | 700 | |
| Depreciation on store fixtures(fixed)* | $ | 2,000 | |
| Rent (fixed) | $ | 2,400 | |
| Miscellaneous (fixed) | $ | 600 | |
*The capital expenditures budget indicates that Camden willspend $82,000 on October 1 for store fixtures, which are expectedto have a $10,000 salvage value and a three-year (36-month) usefullife.
Use this information to prepare a selling and administrativeexpenses budget.
Utilities and sales commissions are paid the month after theyare incurred; all other expenses are paid in the month in whichthey are incurred. Prepare a cash payments budget for selling andadministrative expenses.
Camden borrows funds, in increments of $1,000, and repays themon the last day of the month. Repayments may be made in any amountavailable. The company also pays its vendors on the last day of themonth. It pays interest of 1 percent per month in cash on the lastday of the month. To be prudent, the company desires to maintain a$6,000 cash cushion. Prepare a cash budget.
Camden Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2019. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks:
Prepare a pro forma income statement for the quarter.
Prepare a pro forma balance sheet at the end of the quarter.
Prepare a pro forma statement of cash flows for the quarter.
I'm good with A-G except thedepreciation expense on F is alluding me. I need some help with H,I and J please.
Haas Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2015. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks.
| Required |
| a.& b. | October sales are estimated to be $250,000, of which 40 percentwill be cash and 60 percent will be credit. The company expectssales to increase at the rate of 8 percent per month. The companyexpects to collect 100 percent of the accounts receivable generatedby credit sales in the month following the sale. Prepare a salesbudget and a schedule of cash receipts. |
| c.& d. | The cost of goods sold is 60 percent of sales. The companydesires to maintain a minimum ending inventory equal to 10 percentof the next monthâs cost of goods sold. However, ending inventoryof December is expected to be $12,000. The company pays 70 percentof accounts payable in the month of purchase and the remaining 30percent in the following month. Assume that all purchases are madeon account. Prepare an inventory purchases budget and a cashpayments budget for inventory purchases. (Round youranswers to the nearest whole dollar amount.) |
| e.& f. | Budgeted selling and administrative expenses per month follow. |
| Salary expense (fixed) | $ | 18,000 | |
| Sales commissions | 5 | percent ofSales | |
| Supplies expense | 2 | percent ofSales | |
| Utilities (fixed) | $ | 1,400 | |
| Depreciation on store fixtures (fixed)* | $ | 4,000 | |
| Rent(fixed) | $ | 4,800 | |
| Miscellaneous (fixed) | $ | 1,200 | |
| * | The capital expenditures budget indicates that Haas will spend$164,000 on October 1 for store fixtures, which are expected tohave a $20,000 salvage value and a three-year (36-month) usefullife. |
Utilities and sales commissions are paid the month after theyare incurred; all other expenses are paid in the month in whichthey are incurred. Prepare a selling and administrative expensesbudget and a cash payments budget for selling and administrativeexpenses. (Round your answers to nearest whole dollaramount.) |
| g. | Haas borrows funds, in increments of $1,000, and repays them onthe last day of the month. Repayments may be made in any amountavailable. The company also pays its vendors on the last day of themonth. It pays interest of 1 percent per month in cash on the lastday of the month. To be prudent, the company desires to maintain a$12,000 cash cushion. Prepare a cash budget. (Anyrepayments/shortage which should be indicated with a minus sign.Round your answers to nearest whole dollar amount.) |
| h. | Prepare a pro forma income statement for the quarter.(Round your answers to nearest whole dollaramount.) |
| i. | Prepare a pro forma balance sheet at the end of the quarter.(Amounts to be deducted should be indicated by a minussign.) |
| j. | Prepare a pro forma statement of cash flows for the quarter.(Amounts to be deducted should be indicated by a minussign. Round your answers to nearest whole dollaramount.) |
