Can anyone help me with the ones that are wrong? nment 6 Help Save 8 c Sales are

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Can anyone help me with the ones that are wrong? nment 6 Help Save 8 c Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The f Monthly expenses are as follows: commissions, 12% of sales; rent, $2.900 per month; other expenses (excluding depreciation), 6% g. Equipment costing $2,100 will be purchased for cash in April accounts payable at March 31 are the result of March purchases of inventory. of sales. Assume that these expenses are paid monthly. Depreciation is $972 per month (includes depreciation on new assets) h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Required Using the preceding data 1. Complete the following schedule 2. Complete the following 3. Complete the following cash budget: 4 Prepare an absorption costing income statement for the quarter ended June 30 5. Prepare a balance sheet as of June 30. Complete this question by entering your answers in the tabs below. Prey 3 of 3EE to search

Explanation / Answer

Schedule of expected cash collection April May June Quarter Sales 72,000 77,000 1,02,000 2,51,000 Cash sales 43,200 46,200 61,200 1,50,600 Credit Sales 22,400 28,800 30,800 82,000 Total Collection 65,600 75,000 92,000 2,32,600 Merchandize purchase budget April May June Quarter Sales 72,000 77,000 1,02,000 2,51,000 Cost of Goods sold (75% of sales) 54,000 57,750 76,500 1,88,250 Ending inventory 46,200 61,200 31,800 31,800 This is the inventory on 30 June Total need 1,00,200 1,18,950 1,08,300 3,27,450 Less Opening Inventory 43,200 46,200 61,200 43,200 This is the inventory on April 1 Required Purchases 57,000 72,750 47,100 1,76,850 Schedule of expected cash disbursement April May June Quarter March purchases 25,800 25,800 April purchases 28,500 28,500 57,000 May purchases 36,375 36,375 72,750 June purchases 23,550 23,550 Total disbursement 54,300 64,875 59,925 1,79,100 Cash Budget April May June Quarter Beginning Cash Balance 8100 4,440 4,805 8100 Add Collection from customer 65,600 75,000 92,000 2,32,600 Total Cash available 73,700 79,440 96,805 2,49,945 Less Cash disbursement For inventory 54,300 64,875 59,925 1,79,100 For Expenses Commission 12% of sales 8640 9240 12240 30,120 Rent 2900 2900 2900 8,700 Other expenses 6% of sales 4320 4620 6120 15,060 Equipment purchase 2100 0 0 2,100 Total cash disbursement 72,260 81,635 81,185 2,35,080 Excess( Deficiency of cash available for disbursement 1,440 -2,195 15,620 14,865 Borrowing 3,000 7,000 0 10,000 Repayment 0 0 10,000 10,000 Interest 0 0 230 230 Total financing 3,000 7,000 -10,230 -10,230 Ending Cash Balance 4,440 4,805 5,390 5,390 Interest=(3000*1%*3)+(7000*1%*2) 230 For the quarter ending 30 June Sales 2,51,000 Cost of goods sold 1,88,250 Gross Profit 62,750 Selling & Administrative expenses Commission 30,120 Rent 8,700 Other expenses 15,060 Depreciation 2916 Interest 230 57,026 Net Operating Income 5,724 Assets Cash 5,390 Accounts receivable 40,800 Inventory 31,800 Total current assets 77,990 Building & Equipment-net 128784 Total assets 2,06,774 Liabilities & Shareholders Equity Accounts Payable 23,550 Common stock 1,50,000 Shareholders Equity: Retained Earning 27500 Add: Net Operating Income 5,724 33,224 Total liabilities & shareholders equity 2,06,774

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