Question

Discount Plus Store is a local discount store with the following information: (Click the icon to view the information.) Read the requirements. Requirement 1. Prepare the sales budget for November and December. Discount Plus Store Sales Budget For the Months of November and December November December Cash sales Credit sales Total sales

Answer 1

Calculation Discount Plus Store Sales Budget Req1 Cash sales Credit sales Total sales Nov 69,000 276,000 345,000 Dec 89,700 358,800 448,500 Nov =345,000*20% =345,000*80% =300,000*(1+15%) Dec -448,500*20% -448,500*80% =345,000*(1+30%) Cost of goods sold, Inventory & Purchases budget Req2 Oct Cost of goods sold 225,000 Add Desired Ending Inventory 67,750 Inventory Needed 292,750 Less Beginning Inventory 61,000 Purchases 231,750 Oct Nov Dec =300,000*(1-25%) =345,000*(1-25%) -448,500*(1-25%) =16,000+(258,750*20%) =16,000+(336,375*20%) = 16,000+((300,000*(1-25%))*20%) Nov 258,750 83,275 342,025 67,750 274,275 Dec 336,375 61,000 397,375 83,275 314,100 End Inv of Oct End Inv of Nov Dec Operating Expenses Budget Req3 Wages expense Utilities expense Property tax expense Property and liability insurance expense Depreciation expense Credit/Debit card fees expense Total Operating expenses Nov 7,800 900 1,500 1,500 9,000 2,760 23,460 Dec 7,800 1,200 1,500 1,500 9,000 3,588 24,588 =18,000/12 =18,000/12 =108,000/12 =276,000*1% =18,000/12 =18,000/12 =108,000/12 =358,800*1%

Budgeted Income Statement Req 4 Sales Cost of goods sold Gross Profit Operating expenses Net income Nov 345,000 258,750 86,250 23,460 62,790 Dec 448,500 336,375 112,125 24,588 87,537 Nov Dec Cash Collections Budget Req 5 Cash sales Credit sales net of fees Total cash collections Nov 69,000 273,240 342,240 Dec 89,700 355,212 444,912 =276,000-2,760 =358,800-3,588 Cash Payments Budget Req6 Payment of inventory, 30 days lag Cash payment for wages Cash payment for utilities Cash payment for property tax Cash payment for dividends Property and liability insurance Total payments for operating expenses Nov 231,750 7,800 900 Dec 274,275 7,800 900 18,000 300,000 240,450 600,975 Nov Dec Combined Cash Budget Req7 Beginning Cash balance Add Cash collections Total cash available Less Cash payments Ending cash balance before financing Financing New Borrowings Debt Repayments Interest Payments Ending Cash balance Nov 60,000 342,240 402,240 240,450 161,790 Dec 161,790 444,912 606,702 600,975 5,727 54,273 =60,000-5,727 161,790 60,000