Question

The budget committee of printer office supply has assembled the following data:​​​​​​​
Question 2: The budget committee of Printer Office Supply has assembled the following data: Printer Office Supply Balance Sheet March 31, 2014 Liabilities Current Assets Cash Accounts Receivable Merchandise Inventory Current Liabilities: Accounts Payable S 34,000 15,000 19,500 1,400 16.250 4,725 Salaries and Commissions Payable Total Liabilities $ 20,975 $ 69,900 Stockholders' Equity Prepaid Insurance Total Current Assets Property, Plant, and Equipment: Equipment and Fixtures Common Stock 17,000 72,925 61,000 (20,000) 41,000 Retained Earnings Total Stockholders' Equity 89.925 Less: Accumulated Depreciation Total Assets $ 110,900 $ 110,900 Total Liabilities and Stockholders' Equity More Info a. Sales in April are expected to be $100,000. Printer forecasts that monthly sales will increase 2% over April sales in May. June's sales will increase by 4% over April sales. July sales will increase 20% over April sales. Cash receipts are 80% in the month of the sale and 20% in the month following the sale. b. Printer maintains inventory of $7,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. Purchases are paid 60% in the month of purchase and 40% in the month following the purchase. C. Monthly salaries amount to $3,000. Sales commissions equal 5% of sales for that month. Salaries and commissions are paid 30% in the month incurred and 70% in the following month. d. Other monthly expenses are as follows: • Rent: $2,200, paid as incurred • Depreciation: $300 • Insurance: $100, expiration of prepaid amount Income tax: $1,600, paid as incurred You have prepared the following budgets for April and May Printer Office Supply Sales Budget April and May, 2014 April $ 100,000 $ Total budgeted sales May 102,000 Printer Supply Company Inventory, Purchases, and Cost of Goods Sold Budget April and May, 2014 April Cost of goods sold 50,000 $ Plus: Desired ending merchandise inventory 19,750 Total merchandise inventory required 69,750 Less: Beginning merchandise inventory 19,500 50,250 $ Budgeted Purchases May 51,000 20,000 71,000 19,750 51,250

Answer 1

1.

Schedule of Budgeted Cash Receipts from Customers
	April	May	Total
Cash collected in the month of sale	80,000	81,600	161,600
Cash collected in the month following sale	15,000	20,000	35,000
Total Cash Receipts	95,000	101,600	196,600

2.

Schedule of Budgeted Cash Payments for Purchases
	April	May	Total
Paid in the month of purchase	30,150	30,750	60,900
Paid in the month following purchase	16,250	20,100	36,350
Total Cash Payments for Purchases	46,400	50,850	97,250

3.

Schedule of Budgeted Cash Payments for Selling and Administrative Expenses
	April	May	Total
Salaries and Commissions	7,125	8,030	15,155
Rent	2,200	2,200	4,400
Total Cash Payments for Selling and Administrative Expenses	9,325	10,230	19,555

4.

Cash Budget
	April	May	Total
Beginning Cash Balance	34,000	71,675	34,000
Add: Cash receipts	95,000	101,600	196,600
Total Cash Available	129,000	173,275	230,600
Less: Cash Disbursements for
Purchases	46,400	50,850	97,250
Selling and Administrative Expenses	9,325	10,230	19,555
Income Taxes	1,600	1,600	3,200
Total Cash Disbursements	57,325	62,680	120,005
Ending Cash Balance	71,675	110,595	110,595