Question

i really need help answering this question correctly.

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter B. As of December 31 the end of the prior quarter), the company's general ledger showed the following account balances Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 42,000 201,600 58,850 352,800 $ 85,725 500,000 67,925 5 653,650 5653,650 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $252,000 January $387,000 February $584,000 March $298,000 April $195,000 Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. In other words, cost of goods sold is 60% of sales) Monthly expenses are budgeted as follows: Salaries and wages, $17.000 per month advertising. $57.000 per month shipping, 5% of sales other expenses. 3of sales. Depreciation, including depreciation on new assets acquired during the quarter will be $42.420 for the quarter Proy 1 of 1 III Next

Answer 1

Solution 1:

Schedule of expected cash collections
Particulars	January	February	March	Quarter
Budgeted Sales	$3,87,000.00	$5,84,000.00	$2,98,000.00	$12,69,000.00
Cash Sale	$77,400.00	$1,16,800.00	$59,600.00	$2,53,800.00
Collection for credit sales	$2,01,600.00	$3,09,600.00	$4,67,200.00	$9,78,400.00
Total Collections	$2,79,000.00	$4,26,400.00	$5,26,800.00	$12,32,200.00

Solution 2a:

Merchandise Purchase Budget
Particulars	January	February	March	Quarter
Budgeted Cost of Goods Sold (60% of Sales)	$2,32,200.00	$3,50,400.00	$1,78,800.00	$7,61,400.00
Add: Desired ending merchandise inventory (25% of next month COGS)	$87,600.00	$44,700.00	$29,250.00	$29,250.00
Total Needs	$3,19,800.00	$3,95,100.00	$2,08,050.00	$7,90,650.00
Less: Beginning inventory	$58,050.00	$87,600.00	$44,700.00	$58,050.00
Required purchases	$2,61,750.00	$3,07,500.00	$1,63,350.00	$7,32,600.00

Solution 2b:

Schedule of expected cash disbursement - Merchandise Purchases
Particulars	January	February	March	Quarter
March Purchases	$85,725.00			$85,725.00
April Purchases	$1,30,875.00	$1,30,875.00		$2,61,750.00
May Purchases		$1,53,750.00	$1,53,750.00	$3,07,500.00
June Purchases			$81,675.00	$81,675.00
Total Disbursement	$2,16,600.00	$2,84,625.00	$2,35,425.00	$7,36,650.00

Solution 3:

Schedule of expected cash disbursement of Selling and Administrative expenses
Particulars	January	February	March	Quarter
Salaries and wages	$17,000.00	$17,000.00	$17,000.00	$51,000.00
Advertising	$57,000.00	$57,000.00	$57,000.00	$1,71,000.00
Shipping (5% of sales)	$19,350.00	$29,200.00	$14,900.00	$63,450.00
Other expenses (3% of sales)	$11,610.00	$17,520.00	$8,940.00	$38,070.00
Total Disbursement	$1,04,960.00	$1,20,720.00	$97,840.00	$3,23,520.00

Cash Budget - Hillyard company
Particulars	January	February	March	Quarter
Opening Cash balance	$42,000.00	$30,440.00	$50,295.00	$42,000.00
Add: Collection from customers	$2,79,000.00	$4,26,400.00	$5,26,800.00	$12,32,200.00
Total Cash Available	$3,21,000.00	$4,56,840.00	$5,77,095.00	$12,74,200.00
Less - Cash Disbursement:
For Inventory	$2,16,600.00	$2,84,625.00	$2,35,425.00	$7,36,650.00
For Selling and administrative Expenses	$1,04,960.00	$1,20,720.00	$97,840.00	$3,23,520.00
For Equipment	$0.00	$1,200.00	$71,000.00	$72,200.00
For Cash Dividend	$45,000.00	$0.00	$0.00	$45,000.00
Total Cash disbursement	$3,66,560.00	$4,06,545.00	$4,04,265.00	$11,77,370.00
Excess (deficiency) of cash available over disbursements	-$45,560.00	$50,295.00	$1,72,830.00	$96,830.00
Financing:
Borrowings	$76,000.00	$0.00	$0.00	$76,000.00
Repayments	$0.00	$0.00	-$76,000.00	-$76,000.00
Interest	$0.00	$0.00	-$2,280.00	-$2,280.00
Total Financing	$76,000.00	$0.00	-$78,280.00	-$2,280.00
Ending cash balance	$30,440.00	$50,295.00	$94,550.00	$94,550.00

Solution 4:

Absorption costing income statement - Hillyard Company
for quarter ended March 31
Particulars	Amount
Sales	$12,69,000.00
Cost of goods sold (60%)	$7,61,400.00
Gross profit	$5,07,600.00
Operating expenses:
Salaries and wages	$51,000.00
Advertising	$1,71,000.00
Shipping (5% of sales)	$63,450.00
Other expenses (3% of sales)	$38,070.00
Depreciation	$42,420.00
Total operating expenses	$3,65,940.00
Operating income	$1,41,660.00
Interest expense	$2,280.00
Net Income	$1,39,380.00

Solution 5:

Balance Sheet- Hillyard Company
31-Mar
Particulars	Amount
Assets:
Cash	$94,550.00
Accounts receivables ($298000*80%)	$2,38,400.00
Inventory	$29,250.00
Building and equipment, net ($352000 +$1200+ 71000- $42420)	$3,81,780.00
Total Assets	$7,43,980.00
Liabilities and stockholder's Equity:
Accounts payable (163350*50%)	$81,675.00
Common Stock	$5,00,000.00
Retained Earnings ($67925 + $139380- $45000)	$1,62,305.00
Total liabilities and stockholders equity	$7,43,980.00