Davis Dry Goods distributes silk ties. You are in
charge of creating Davis master budget for the upcoming second
quarter, April-June 2018.
Davis desires a minimum ending cash balance each month
of $10,000. The ties are sold to retailers for $9 each. Recent and
forecasted sales in units are as follows:
January (actual) . . . . . . . . . 21,000
February (actual) . . . . . . . . 25,000
March (actual) . . . . . . . . . . 27,000
April . . . . . . . . . . . . . . . . . .
32,000
May . . . . . . . . . . . . . . . . . .
45,000
June . . . . . . . . . . . . . . . . . .
65,000
July . . . . . . . . . . . . . . . . . .
43,000
August . . . . . . . . . . . . . . . 40,000
September . . . . . . . . . . . . . 36,000
The large build-up in sales before and during June is
due to Father's Day. Ending inventories are supposed to equal 90%
of the next month's sales in units. The ties cost the company $5
each.
Purchases are paid for as follows: 50% in the month of
purchases and the remaining 50% in the following month. All sales
are on credit, with no discount, and payable within 15 days. The
company has found, however, that only 25% of a month's sales are
collected by month-end. An additional 75% is collected in the
following month. Bad debts have been negligible.
The company's monthly selling and administrative
expenses are given below:
Variable:
Sales Commissions…...$1 per tie
Fixed:
Wages and Salaries....$25,200
Utilities………..$16,000
Insurance……….$1,300
Depreciation……….$1,500
Miscellaneous……….$3,600
All selling and administrative expenses are paid
during the month, in cash with the exception of depreciation and
insurance expired.
Davis has an agreement with a bank that allows it to
borrow in increments of $1,000 at the beginning of each month. The
interested rate on these loans is 1% per month, and for simplicity,
we will assume that interest is not compounded. At the end of the
quarter, the company would the bank all of the accumulated interest
on the loan and as much of the loan as possible (in increments of
$1,000), while still retaining at least $10,000 in cash.
Land will be purchased during May for $21,000 cash.
Davis declares and pays dividends of $10,000 in the first month
each quarter. The company's balance sheet at March 31 is given
below:
Assets March 31st
Cash-------------------------------------------------------------
$11,000
Accounts
receivable------------------------------------------$182,250
Inventory (31,500 ties)
---------------------------------------$144,000
Prepaid
insurance--------------------------------------------..$15,600
Fixed assets,
net--------------------------------------------$217,100
Total
Assets--------------------------------------------------569,950
Liabilities & Stockholders Equity
Accounts
Payable-------------------------------------------$
78,750
Capital
Stock------------------------------------------------$310,000
Retained
Earnings----------------------------------------$181,200
Total Liabilities and Stockholders
Equity---------$569,950
Required:
Prepared a master budget for Davis Dry Goods for the
quarter ending June 30, 2015.
Include the following detailed budgets.
1. A cash budget by month, but not in total
2. A budgeted income statement for the three-month period ending June 30.
3. A budgeted balance sheet as of June 30.
Cash ending in June will be $10,050 on the Cash Budget statement, if completed correctly according to my professor.
Net income will be $281,400 on the Income Statement, if completed correctly according to my professor.
Total assets will be $887,600 on the budgeted balance
sheet, if completed correctly according to my professor.
Davis Dry Goods distributes silk ties. You are in charge of creating Davis master budget for the upcoming second quarte...
Davis Dry Goods distributes silk ties. You are in charge of creating Davis master budget for the upcoming second quarter, April-June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $9 each. Recent and forecasted sales in units are as follows: January (actual) . . . . . . . . . 21,000 February (actual) . . . . . . . . 25,000 March (actual) . . . ....
Davis Dry Goods distributes silk ties. You are in charge of creating Davis master budget for the upcoming second quarter, April-June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $9 each. Recent and forecasted sales in units are as follows: January (actual) . . . . . . . . . 21,000 February (actual) . . . . . . . . 25,000 March (actual) . . . ....
Davis Dry Goods distributes silk ties. You are in charge of creating Davis master budget for the upcoming second quarter, April-June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $9 each. Recent and forecasted sales in units are as follows: January (actual) . . . . . . . . . 21,000 February (actual) . . . . . . . . 25,000 March (actual) . . . ....
Davis Dry Goods distributes silk ties. You are in charge of creating Davis' master budget for the upcoming second quarter, April-June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: January (actual) February (actual) March (actual) April Мay 22,000 June 33,000 July 37,000 August 41,000 September 51,000 67,000 46,000 37,000 34,000 The large buildup in sales before and during...
Davis Dry Goods distributes silk ties. You are in charge of creating Davis master budget for the upcoming second quarter, April-June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: January (actual) . . . . . . . . . 24,000 February (actual) . . . . . . . . 25,000 March (actual) . . . ....
Davis Dry Goods distributes silk ties. You are in charge of creating Davis' master budget for the upcoming second quarter, April - June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: January (actual) February (actual) March (actual) April May 22,000 June 33,000 July 37,000 August 41,000 September 51,000 67,000 46,000 37,000 34,000 The large buildup in sales before...
Davis Dry Goods distributes silk ties. You are in charge of creating Davis' master budget for the upcoming second quarter, April - June 2018. Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: 22,000 June 33,000 July 37,000 August 41,000 September 51,000 67,000 January (actual) February (actual) March (actual) April May 46,000 37,000 34,000 The large buildup in sales before...
Davis Dry Goods distributes silk ties. You are in charge of creating Davis' master budget for the upcoming second quarter, April - June 2018. Davis desires a minimum ending cash balance each month of $10.000. The ties are sold to retailers for $8 each Recent and forecasted sales in units are as follows: January (actual) February (actual) March (actual) April May 22,000 June 33,000 July 37,000 August 41,000 September 51,000 67,000 46,000 37,000 34,000 The large buildup in sales before...
Davis Dry Goods distributes silk ties. You are in charge of creating Davis' master budget for the upcoming second quarter, April - June 2018 Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: January (actual) February (actual) March (actual) April May 22,000 33,000 37.000 41,000 51,000 June July August September 67,000 46.000 37.000 34,000 The large buildup in sales before...
Project 2 - Case 4 40 points Davis Dry Goods distributes silk ties. You are in charge of creating Davis' master budget for the upcoming second quarter, April-June 2018 Davis desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: Cashes January (actual) February (actual) March (actual) April May 22,000 June 33.000 July 37.000 August 41,000 September 51,000 67.000 46,000 37,000 34.000...