ACC 1820 Project 4 (Ch 7) Use Question 11 from HW6 on CONNECT to complete the pr

Question

ACC 1820 Project 4 (Ch 7) Use Question 11 from HW6 on CONNECT to complete the project requirements represent check figures provided 1) (5 points) Let's prepare a balance sheet for Garden Sales, Inc. at the BEGINNING of the quarter Name tems March 31". The CONNECT problem provides beginning cash, Inventory and balance as of March 31. To complete the balance shcet, we will have to calculate a few balances a) Look at the Schedule of Expected Cash Collections that you completod on CONNECT (CONNECT results) Remember the accounts receivable represents the sales that have already been made but payment is expected in the future. What would the accounts receivable balance be as of March 31? b) Complete the asset side of the balance sheet including total assets. Include the "total asset" amount in the "total liability& SH Equity" box. Include the accounts payable amount from CONNECT and calculate the amount of retained carnings such that the balance sheet will balance e) Garden Sales, Inc Balance Sheet March 31 Cash Accounts Receivable Inventory Accounts Payable Common Stock Retained Earnings Total SH Equity Total liabilities & SH Equity Total current assets Plant Asscts, nct 0 Total Assets The company's president is concerned about its ability to borrow money on its line of credit. The bank has indicated they will reduce the total loan balance limit to $100,000. Because of this, the president wants to know how increased collection efforts and reduced inventory levels will impact the cash budget. The president suggests that sales continue to be 20% for cash and 80% on credit. However, credit sales for April, May, and June will be collected over a treo-month period with 2S% colloid in the moth of sale, 65% collected in the month following sale, and 10% in the second month following sale. This change in policy will not affect collection of sales from February and March. (Assume those are unchanged from your CONNECT problem.)

Explanation / Answer

Working:

Accounts receivable = $31200 + $212400 = $243600

Total SH equity = $755400 - $133000 = $622400

Retained earnings = $622400 - $100000 = $522400

Garden Sales, Inc. Balance Sheet March 31 Cash 61000 Accounts payable 133000 Accounts receivable 243600 Inventory 100800 Common stock 100000 Total current assets 405400 Retained earnings 522400 Plant assets, net 350000 Total SH equity 622400 Total assets 755400 Total liabilities & SH equity 755400

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