Question

Homework: P9-72B Save 1 of 1 (0 completa) Score: 0 of 8 pts P9-72B (similar to) HW Score: 0%, 0 of 8 pts Question Help O Discount Dollar Store is a local discount store with the following information: (Click the icon to view the information.) i Read the requirements. Data Table Requirement 1. Prepare the sales budget for November and December Discount Dollar Store Sales Budget For the Months of November and December November December Cash sales Credit sales Total sales October sales are projected to be $380,000. Sales are projected to increase by 15% in November and another 25% in December and then return to the October level in January 30% of sales are made in cash while the remaining 70% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 4% transaction fee, and deposit the net amount (sales price loss the transaction fou) in the storu's bank account daily. The store does not accept checks. Because of the payment mechanisms, there is no risk of non-payment or bad-debts. • The store's gross profit is 30% of its sales revenue . For the next several months, the store wants to maintain an ending merchandise inventory equal to $16,000 plus 20% of the next month's cost of goods sold. All purchases for merchandise are made on account and paid in the month following the purchase. The September 30 inventory is expected to be $69.200. Expected monthly operating expenses and details about payments include the following: • Wages of store workers should be $7,400 per month and are paid on the last day of each month. • Utilities expense is expected to be $1,300 per month in September, October, and November • Utilities expense is expected to be $1,800 per month during the colder months of December, January, and February * All utility bills are paid the month after incurred. • Property tax is $27.600 per year and is paid semiannually each December and June. • Property and liability insurance is $13,200 per year and is paid semiannually each January and July + Depreciation expense is $100,000 per year; the straight-line method used. • Transaction fees, as stated earlier, are 4% of credit and debit card sales. Cash dividends of $250,000 are to be paid in December. Assume the cash balance on October 31 is $65,000. The company wants to maintain a cash balance of at least $65.000 at the end of every month. The company has arranged a line of credit with a local bank at a 8% interest rate. There is no outstanding debt as of October 31. Enter any number in the edit fields and then click Check Answer. • 7 parts remaining Print Done

Answer 1

Calculation Nov Dec Discount Dollar Store Sales Budget Req1 Cash sales Credit sales Total sales 131,100 305,900 437,000 163,875 382,375 546,250 Nov -437,000*30% -437,000*70% =380,000*(1+15%) Dec =546,250*30% =546,250*70% -437,000*(1+25%) Cost of goods sold, Inventory & Purchases budget Req2 Oct Cost of goods sold 266,000 Add Desired End Inventory 77,180 Inventory Needed 343,180 Less Beginning Inventory 69,200 Purchases 273,980 Oct Nov Dec -380,000*(1-30%) -437,000*(1-30%) =546,250*(1-30%) -16,000+(305,900*20%) =16,000+(382,375*20%) -16,000+((380,000*(1-30%))*20%) Nov 305,900 92,475 398,375 77,180 321,195 Dec 382,375 69,200 451,575 92,475 359,100 End Inv of Oct End Inv of Nov Dec Operating Expenses Budget Req3 Wages expense Utilities expense Property tax expense Property and liability insurance expense Depreciation expense Credit/Debit card fees expense Total Operating expenses Nov 7,400 1,300 2,300 1,100 9,000 12,236 33,336 Dec 7,400 1,800 2,300 1,100 9,000 15,295 36,895 =27,600/12 =13,200/12 =108,000/12 =305,900*4% =27,600/12 =13,200/12 =108,000/12 =382,375*4% Budgeted Income Statement Req 4 Sales Cost of goods sold Gross Profit Operating expenses Net income Nov 437,000 305,900 131,100 33,336 97,764 Dec 546,250 382,375 163,875 36,895 126,980 Nov Dec Cash Collections Budget Req5 Cash sales Credit sales net of fees Total cash collections Nov 131,100 293,664 424,764 Dec 163,875 367,080 530,955 =305,900-12,236 =382,375-15,295

Νον 273,980 7,400 Cash Payments Budget Req6 Payment of inventory, 30 days lag Cash payment for wages Cash payment for utilities Cash payment for property tax Cash payment for dividends Property and liability insurance Total payments for operating expenses Dec 321,195 7,400 1,300 27,600 250,000 1,300 282,680 607,495 Combined Cash Budget Reqz Beginning Cash balance Add Cash collections Total cash available Less Cash payments Ending cash balance before financing Financing New Borrowings Debt Repayments Interest Payments Ending Cash balance Nov 65,000 424,764 489,764 282,680 207,084 Dec 207,084 530,955 738,039 607,495 130,544 207,084 130,544