Question

Can anyone help me with the ones that are wrong?

Also explain how you get the answers

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

Answer 1

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