Question

I figured out everything except for the last question (balance sheet). Here are the numbers, thank you

The following data relate to the operations of Lim Corporation, a wholesale distributor of consumer goods Current assets as of December 31 S 6,000 36,000 9,800 110,885 32,550 100,000 30,135 Cash Accounts receivable Buildings and equipment, net Accounts payable Common shares Retained earmings a. The gross margin is 30% of sales. b.Actual and budgeted sales data are as follows: December (actual $60,000 January February March April 70,000 80,000 85,000 55,000 C. Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. d. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold e. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three- f. Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (excluding g. Equipment will be acquired for cash: $3,000 in January and $8,000 in February. quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter h. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows it to borrow up to a total loan balance of $50,000. The interest rate on these loans is 0.5% per month, and interest payments must be made at the end of each month. Assume all borrowing occurs at the beginning of a month. The company will, as far as it is able, repay outstanding loans at the end of each month. Required: 1. Using the data above, complete the following schedule: Schedule of Expected Cash Collections JanuaryFebruary March Quarter $28,000 32,000 34,000 $ 94,000 Cash sales Credit sales Total collections 36,000 42,000 48,000 126,000 S 64,000 74,000 82,000$ 220,000 2. Using the data above, complete the following Merchandise Purchases Budget JanuaryFebruary March Quarter Budgeted cost of goods sold49,000 Add desired ending invent Total needs 56,000$ 59,500164,500 7,700 67,200 72,200 9,800 $50,40056,700$ 55,300 162,400 11,200 60,200 9,800 7,700 11,900 67,900 11,200 Less beginning inventory 11,900 Required purchases $70,000 sales x 70%-$49,000. t$80,000 x 70% x 20%-$11,200 Schedule of Expected Cash Disbursements-Merchandise Purchases Janua February March Quarter s 32.550f s 12,600 December purchases January purchases February purchases March purchases Total disbursements 0 32,550 50,400 56,700 13,825 $ 45,150 S 51,975$ 56,350 S 153,475 or S 37,800 14,175 0 42,525 13,825 0 g balance of the accounts payable 3. Using the data above, complete the following schedule: Schedule of Expected Cash Disbursements-Selling and Administrative Expenses Quarter Jan February March Commissions Rent Other expenses Total disbursements 12,000 12,000 2,000 36,000 5,400 18,800 $ 19,400 20,20020,600$60,200 1,800 1,800 1,800 5,600 6,400 6,800 5. Prepare an absorption costing income statement for the quarter ended March 31 Lim Corporation Income Statement For the Quarter Ended March 31 Sales $ 235,000 Cost of goods sold Beginning inventory Add: Purchases Goods available for sale Less: Ending inventory Gross margin 9,800 162,400 72,200 7,700 164,500 70,500 Selling and administrative expenses: Rent Other expenses Depreciation 36,000 5,400 18,800 2,400 62,600 7,900 (101) 7,799 Operating income Interest expense Net income 6. Prepare a balance sheet as of March 31. Lim Corporation Balance Sheet March 31 Assets Current assets: Cash Account receivable Inventory Total current assets Total assets Liabilities and Stockholders' Equity Stockholders' equity: Common shares Retained earnings Total liabilities and stockholders' equity 0

Answer 1

Lim Corporation Balance Sheet March 31 Assets Current Assets: Cash Accounts Receivable Inventory Total Current Assets Building and Equipment, Net Total Assets 5,000 $ 51,000 7,700 $63,700 $ 119,485 $ 183,185 Liabilities and Stockholders' Equit $41,475 3,776 $ 45,251 Accounts Payable Bank Loan Total Liabilities Stockholders' Equity Common Shares Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $100,000 S 37,934 $137,934 $183,185

Cash = $5,000 (from cash budget)

Accounts Receivable = 60% * March Sales
Accounts Receivable = 60% * $85,000
Accounts Receivable = $51,000

Inventory = $7,700 (from income statement)

Building and Equipment, net = Beginning Building and Equipment, net + New Equipment acquired - Depreciation
Building and Equipment, net = $110,885 + $3,000 + $8,000 - $2,400
Building and Equipment, net = $119,485

Accounts Payable = 75% * March Purchases
Accounts Payable = 75% * $55,300
Accounts Payable = $41,475

Bank Loan = Amount Borrowed - Amount Repaid
Bank Loan = $8,782 - $5,006
Bank Loan = $3,776

Retained Earnings = Beginning Retained Earnings + Net Income
Retained Earnings = $30,135 + $7,799
Retained Earnings = $37,934