Question

help please

Winter 2020 Budget Planning Following is selected information relating to the operations of Pocketchange Company, a tile distributor September 30, 2020 - Trial Balance information Cash.. Accounts receivable.... Inventory... Plant and equipment, net of Acc Dep Accounts payable.......... Capital stock........................ Retained earnings.................... 8.000 24.800 39.600 428 200 24,050 150.000 326,550 $ 500 600 $ 500,600 a. Actual and budgeted sales data: September (actual).................. October November December.... January... 62,000 66,000 80.000 94,000 48,000 b. Gross profit is 25% of sales (or 75% Cost of Goods Sold %). C. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at September 30 are a result of the September's credit sales. d. At the end of each month, inventory on hand is to be equal to 80% of the following month's sales needs, stated at cost. e. One-half of a month's inventory purchases is paid in the month of purchase the other half is paid in the following month. The accounts payable at September 30 are a result of September purchases of inventory. 1 Monthly expenses are as follows: salaries and wages, 12% of sales rent. $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $1,300 per month (includes depreciation on new assets) 9. Equipment costing $7,000 will be purchased for cash in the October and another $5,000 in November h. The company must maintain a minimum cash balance of $5,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month: borrowing and repayments must be made in multiples of $1,000. The annual interest rate is 12% Interest is paid only at the time of repayment of principles figure interest on the whole month (2/12, 3/12, and so forth). Any unpaid interest is accrued at the end of the quarter. Budget(excel

Answer 1

Sales	66000	80000	94000
1. Schedule of Expected Cash collections
	Oct.	Nov.	Dec.	Quarter
Cash Sales	$39,600	$48,000	$56,400	$1,44,000
Credit Sales	$24,800	$26,400	$32,000	$83,200
Total Collections	$64,400	$74,400	$88,400	$2,27,200
2. Inventory Purchases Budget
	Oct.	Nov.	Dec.	Quarter
Budgeted Cost of Goods sold*	$49,500	$60,000	$70,500	$1,80,000
Add: Desired ending inventory**	$48,000	$56,400	$28,800	$1,33,200
Total needs	$97,500	$1,16,400	$99,300	$3,13,200
Less: Beginning Inventory	$39,600	$48,000	$56,400	$1,44,000
Required Purchases	$57,900	$68,400	$42,900	$1,69,200
* Oct sales x75% cost ratio
** Nov. sales x75% cost ratio x80%
Schedule of Expected Cash Disbursements-Purchases
	Oct.	Nov.	Dec.	Quarter
Sept. purchases	$24,050			$24,050
Oct. purchases	$28,950	$28,950		$57,900
Nov. purchases		$34,200	$34,200	$68,400
Dec. purchases			$21,450	$21,450
Total Disbursements for purchases	$53,000	$63,150	$55,650	$1,71,800
3. Schedule of Expected Cash Disbursements-Operating Expenses
	Oct.	Nov.	Dec.	Quarter
Salaries and wages	$7,920	$9,600	$11,280	$28,800
Rent	$2,500	$2,500	$2,500	$7,500
Other Expenses	$3,960	$4,800	$5,640	$14,400
Total Disbursements	$14,380	$16,900	$19,420	$50,700
4. Cash Budget (Cash Receipts and Disbursements)
	Oct.	Nov.	Dec.	Quarter
Cash Balance, beginning	$8,000	$5,020	$5,370	$8,000
Add: Cash Collections	$64,400	$74,400	$88,400	$2,27,200
Total Cash available	$72,400	$79,420	$93,770	$2,35,200
Less: Cash Disbursements
For Inventory	$53,000	$63,150	$55,650	$1,71,800
For Expenses	$14,380	$16,900	$19,420	$50,700
For Equipment	$7,000	$5,000	$0	$12,000
Total Cash Disbursements	$74,380	$85,050	$75,070	$2,34,500
Expected Cash Balance/(Overdraft)	-$1,980	-$5,630	$18,700	$700
Financing:
Borrowing (at beginning)	$7,000	$11,000	$0	$18,000
Repayments(at end)	$0	$0	$13,000	$13,000
Interest (at 12% per year)	$0	$0	$390	$390
Total Financing	$7,000	$18,000	$5,000	$5,000
Cash balance, ending	$5,020	$5,370	$5,310	$5,310

Pocketchange Company
Income Statement
For the quarter ended December 31, 2020
Sales		$2,40,000
Beginning Inventory	$39,600
Purchases	$1,69,200
Goods Available	$2,08,800
Ending Inventory	$28,800
Cost of goods sold		$1,80,000
Gross Margin		$60,000
Operating Expenses:
Salaries	$28,800
Rent	$7,500
Depreciation	$3,900
Other expenses	$14,400	$54,600
Net Operating Income		$5,400
Less: Interest Expenses		$540
Net Income		$4,860
Pocketchange Company
Balance Sheet
December 31, 2020
Assets
Cash (Part 4)		$5,310
Accounts Receivable		$37,600
Inventory (Part 2)		$28,800
Total Current Assets		$71,710
Fixed Assets-net of accumulated Depreciation		$4,36,300
Total Assets		$5,08,010
Liabilities and Equity
Accounts Payable		$21,450
Notes Payable		$5,000
Interest Payable		$150
Total Liabilities		$26,600
Stockholders' Equity:
Capital Stock	$1,50,000
Retained Earnings	$3,31,410	$4,81,410
Total Liabilities and Equity		$5,08,010