Business, 13.10.2020 04:01 gutierrezaandrea56
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below. The company sells many styles of earrings, but all are sold for the same priceâ$10 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 20,000 June (budget) 50,000 February (actual) 26,000 July (budget) 30,000 March (actual) 40,000 August (budget) 28,000 April (budget) 65,000 September (budget) 25,000 May (budget) 100,000 The concentration of sales before and during May is due to Motherâs Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $4 for a pair of earrings. One-half of a monthâs purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20% of a monthâs sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Monthly operating expenses for the company are given below: Variable: Sales commissions . . . . . . . . . . . . . 4% of sales Fixed: Advertising . . . . . . . . . . . . . . . . . . . . $200,000 Rent .. . . . . . . . . . . . . . . . . . . . . . . $18,000 Salaries . . . . . . . . . . . . . . . . . . . . . $106,000 Utilities . . .. . . . . . . . . . . . . . . . .. . $7,000 Insurance . . . . .. . . . . . . . . . . . . . . . $3,000 Depreciation . . . . . . . .. . . . . . . . . . . $14,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $16,000 in new equipment during May and $40,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $15,000 each quarter, payable in the first month of the following quarter. A listing of the companyâs ledger accounts as of March 31 is given below: Assets Cash . . . . . . . . . . . . . . . . . . . . . $ 74,000 Accounts receivable ($26,000 February sales; $320,000 March sales) . . . . .. . . . . . . . 346,000 Inventory. . . . . . . . . . . . . . . . . . 104,000 Prepaid insurance . . . . . . . . . . . . . 21,000 Property and equipment (net) . . . . . . . . 950,000 Total assets . . . . . . . . . . . . . . . $1,495,000 Liabilities and stockholdersâ Equity Accounts payable . . . . . . . . . . . .. $100,000 Dividends payable . . . . . . . . . . . . 15,000 Common stock . . . . . . . . . . . . . . . 800,000 Retained earnings . . . . . . . . . . . . . 580,000 Total liabilities and stockholdersâ equity .. . . $1,495,000 The company maintains a minimum cash balance of $50,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. The company has an agreement with a 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. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $50,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets: 1. a. A sales budget, by month and in total. b. A schedule of expected cash collections from sales, by month and in total. c . A merchandise purchases budget in units and in dollars. Show the budget by month and in total. d. A schedule of expected cash disbursements for merchandise purchases, by month and in total. 2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000. 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach. 4. A budgeted balance sheet as of June 30.
Answers: 2
Business, 22.06.2019 01:00
Awidower devised his fee simple interest in his residence as follows: âto my daughter for life, then to my oldest grandchild who survives her.â at the time of the widowerâs death, he was survived by his only two children, a son and a daughter, and by one grandchild, his daughterâs son. a short time later, the daughter together with her son entered into a contract to sell the residence in fee simple to a buyer. the applicable jurisdiction continues to follow the common law rule against perpetuities, but has abrogated the rule in shelleyâs case. at the closing, the buyer refused to purchase the residence. can the sellers compel the buyer to do so?
Answers: 2
Business, 22.06.2019 10:30
You meet that special person and get married. amazingly your spouse has exactly the same income you do 47,810. if your tax status is now married filing jointly what is your tax liability
Answers: 2
Business, 22.06.2019 10:30
Which analyst position analyzes information using mathematical models to business managers make decisions? -budget analyst -management analyst -credit analyst -operations research analyst
Answers: 1
Business, 22.06.2019 20:20
Which of the following entries would be made to record the requisition of $12,000 of direct materials and $6,900 of indirect materials? (assume that indirect materials are included in raw materials inventory.) a. manufacturing overhead 18,900 raw materials inventory 18,900 b. wip inventory 12,000 manufacturing overhead 6,900 raw materials inventory 18,900 c. raw materials inventory 18,900 wip inventory 18,900 d. wip inventory 18,900 raw materials inventory 18,900
Answers: 1
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earring...
Mathematics, 18.02.2020 05:01
English, 18.02.2020 05:01
Mathematics, 18.02.2020 05:01
Law, 18.02.2020 05:01
English, 18.02.2020 05:01
Social Studies, 18.02.2020 05:01
Computers and Technology, 18.02.2020 05:01