Ch. Knowledge Any ESA-Third Party Credit C.. Suggested Stes aESA -Third Party Cr

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Ch. Knowledge Any ESA-Third Party Credit C.. Suggested Stes aESA -Third Party Credit C here-C Suggested Sites. The Lobby March Networks Comma.. Lobby March Networks Comm.a.. Web Slice Gallery The Lobby March Networks Comma le value 3.00 points Problem 7-22A Cash Budget with Supporting Schedules [L07-2. LO74, LO78] planning its cash needs for the second quarter Garden Sales, Inc., sells garden supplies. Management is The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter a Budgeted monthly absorption costing income statements for April-July are April MayJuneJuly Sales $ 810,000 $ 890,000 324,000 560,000 567,000 623,000 226,800 392,000 Cost of goods sold Gross margin Selling and administrative expenses 243,000 267,00097,200 168,000 Selling expense Administrative expense 95,000 132,000 37,00056,000 52,500 92,000 36,400 53,000 147,500 224,000 73,400 109,000 $ 95,500 $ 43,000 23,800 S 59,000 Total selling and administrative expenses Net operating income Includes $24,000 of depreciation each month bSales are 20% for cash and 80% on account Sales on account are collected over a three-month period with 10% colected in the month of sale: 70% colected in the first month following the month of sale, and the remaining 20% collected in the word month following the month of sale. February's sales totaled $220.000, and March's sales totaled $320,000 purchases are paid for within 15 days Therefore, 50% of a month's inventory purchases are paid for in the month of Purchase The remaining 50% is paid in the following month Accounts payable at March 31 for inventory purchases during March total $146,300 eEach month s end giver to y must equal 20% ofthe cost of the merchandise to be sold in the folowing t Dividends of $44.000 will be declared and paid in April h The cash balance at March 31 is $66,000, the company must maintain a cash balance of atleast $40,000 L The company has an agreement with a local bank that allows the company to borrow in increments of month. The merchandise inventory at March 31 is $113,400 Land costing $56,000 will be purchased for cash in May at the end of each month $1,000 at the beginning of each month, up to a total loan balance of $200.000 The interest rate on these loans is 1% per month and for singloty wo wil assume that interest is not compounded The company would, as tar as·is able, repay the loan phas accumulated interest at the end of the quarter Required: . Propare a schedudle of expected cash collections for April, May, and June, and for the quarter in total Garden Sales, Inc. Schedule of Expected Cash Collections Service C RESERVATIONS: 855

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1. Expected Cash Collection' Feb March April May June Quarter Total Sale 220000 320000 810000 890000 324000 2024000 Cash Sales A 20% 44000 64000 162000 178000 64800 404800 Sales on Account: 80% 176000 256000 648000 712000 259200 1619200 February B 17600 123200 35200 35200 March C 25600 179200 51200 230400 April D 64800 453600 129600 648000 May E 71200 498400 569600 June F 25920 25920 Total Cash Collection (A+B+C+D+E+F) 441200 754000 718720 1913920 2a. Purchases budget April May June July Budgeted cost of goods sold 567000 623000 226800 560000 Add: Ending Inventory 20% of subsequent month COGS 124600 45360 112000 Total Needs 691600 668360 338800 Less: Beginning Inventory Closing of last month is beginging 113400 124600 45360 Required Inventory Purchase 578200 543760 293440 2a. Cash Disbursment Schedule April May June July Quarter Beginning Accounts Payable 146300 146300 April Purchase (50% in same & 50% in next month) of Inventory purcase in Part 2a 289100 289100 578200 May Purchase 271880 271880 543760 June Purchase 146720 146720 Total Cash Disbursment 435400 560980 418600 1414980

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