Hillyard Company, an office supplies specialty store, prepares its master budget

Question

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: 53,000 210,400 59,700 Cash Accounts receivable Inventory Buildings and equipment Accounts payable Common stock Retained earnings (net) 89,025 500,000 97,075 $ 686.100s 686,100

Explanation / Answer

1)                       Schedule of Expected cash collections                      January Feburary March Quarter Cash sales 79600 119000 61800 260400 Credit sales 210,400 318400 476000 1,004,800 total collections 290000 437400 537800 1265200 Accounts receivable at march 31= 309,000*80%=247,200 2-a) Merchandise purchase budget January Feburary March Quarter April budgeted cost of goods sold 238800 357000 185400 781200 123600 Add:Ending inventory 89250 46350 30900 30,900 total needs 328050 403350 216300 812100 less Beginning inventory 59,700 89,250 46,350 59,700 Required purchases 268,350 314,100 169,950 752,400 2-b) Schedule of Expected cash disbursement for Merchandise purchase January Feburary March Quarter December purchases 89,025 89,025 january purchases 134175 134175 268350 Feburary purchases 157050 157050 314100 march purchases 84975 84975 total cash disbursement for purchases 223,200 291225 242025 756,450 Accounts payable= 84,975 3) Cash budget January Feburary March Quarter Beginning cash balance 53,000 30,960 31235 53,000 Add cash collections 290000 437400 537800 1265200 total cash available 343,000 468360 569035 1,318,200 less cash disbursements purchase of inventory 223,200 291225 242025 756,450 selling and adm expense 127840 143600 120720 392160 purchase of equipment 0 2,300 76,500 78800 cash dividends 45,000 0 0 45,000 total cash disbursement 396,040 437125 439245 1,272,410 Excess(Deficiency) of cash -53,040 31235 129790 45,790 Financing Borrowings 84,000 0 0 84,000 Repayments 0 0 -84,000 -84000 interest 0 0 -2,520 -2520 total financing 84,000 0 -86520 -2,520 ending cash balance 30,960 31235 43270 43,270 interest expense = 84000*1%*3 2520

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.