Question

w Balance Sheet March 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total Habilities and stockholders equity 71.800 42.80 46,000 149,000 309,600 points $ Skipped $ 125, 100 70,000 114,500 $ 309,600 eBook References Budgeted Income Statements April Sales $120,000 Cost of goods sold 72,000 Gross margin 48,000 Selling and administrative expenses 18,100 Net operating income $ 29,900 May $130,000 78,000 52.000 19,600 $ 32,400 June $150,000 90.0 60.ee $ 37,400 Budgeting Assumptions: a. 60% of sales are cash sales and 40% of sales are credit sales. Twenty percent of all credit sales are collected in the month of sale and the remaining 80% are collected in the month subsequent to the sale. b Budgeted sales for July are $160,000 C. 10% of merchandise inventory purchases are paid in cash at the time of the purchase. The remaining 90% of purchases are credit purchases. All purchases on credit are paid in the month subsequent to the purchase. The accounts payable at March 31 will be paid in April d. Each month's ending merchandise inventory should equal $10,000 plus 50% of the next month's cost of goods sold e. Depreciation expense is $1.850 per month All other selling and administrative expenses are paid in full in the month the expense is inert

Answer 1

Solutions:

April May Schedule of expected cash collection - Deacon company Particulars June Accounts Receivables from March $42,800.00 Cash sales (Sales*60%) $72,000.00 $78,000.00 $90,000.00 10 Cash received for April credit Sale $9,600.000 $38,400.00 Cash received for May credit Sale $10,400.00 $41,600.00 12 Cash received for June credit Sale $12,000.00 13 14 Budgeted Cash Collection $124,400.00 $126,800.00 $143,600.00 Quarter $42,800.00 $240,000.00 $48,000.00 $52,000.00 $12,000.00 11 $394,800.00 15 16 17 18 19 April 20 Total $240,000.00 Merchandise Purchase Budget - Deacon Company Particulars May June Cost of Sales (60% of Sales) $72,000.00 $78,000.00 $90,000.00 Add: Desired ending inventory ($10000+50% of COGS of next month) $49,000.00 $55,000.00 $58,000.00 Less: Opening Inventory $46,000.00 $49,000.00 $55,000.00 22 $58,000.00 $46,000.00 Budgeted purchases (in dollars) $75,000.00 $84,000.00 $93,000.00 $252,000.00 26 27 28 29 30 31 32 Schedule of expected cash disbursement for merchandise purchases - Deacon Company Particulars April May June Quarter Payables from March $125,100.00 $125,100.00 July Purchases $7,500.00 $67,500.00 $75,000.00 August Purchases $8,400.00 $75,600.00 $84,000.00 September Purchases $9,300.00 $9,300.00 34 Total payments in month $132,600.00 $75,900.00 $84,900.00 $293,400.00 35 36 47 48 49 eet27 Sheet156 (30) ) Sheet29 Sheet181 (29) Sheet181 (30)

R 15 Balance Sheet- Deacon Company 31-June Particulars Amount Assets: Cash ($71800 + $394800 - $293400 - $18100-19600-22600+1850*3) Accounts receivables ($150,000*40%*80%) Inventory $118,450.000 $48,000.00 $58,000.00 Buildings and equipment net of depreciation ($149,000 - $1850*3) Total Assets $143,450.00 $367,900.00 28 29 30 Liabilities and stockholder's Equity: Accounts payable ($93000*90%) Common Stock |Retained Earnings ($114500 + $29900+32400+37400) Total liabilities and stockholders equity $83,700.00 $70,000.00 $214,200.00 $367,900.00 44 51 52 53 eet27 Sheet156 (30) ) Sheet29 Sheet181 (29) Sheet181 (30)