argaret's Massages is a day spa providing relaxing treatment to its clients. Margaret's Massages balance sheet for June 30, 2021 is as follows: Margaret's MassagesBalance SheetJune 30, 2021 Assets Current Assets: Cash $15,270 Accounts Receivable $1,840 Prepaid Insurance $770 Total Current Assets $17,880 Property, Plant & Equipment Equipment & Fixtures $18,620 Less: Accumulated Depreciation ($3,470) $15,150 Total Assets $33,030 Liabilities Current Liabilities: Accounts Payable $1,900 Total Liabilities $1,900 Stockholders' Equity Common Stock, no par $10,420 Retained Earnings $20,710 Total Stockholders' Equity $31,130 Total Liabilities and Stockholders' Equity $33,030 The following information is also included: Sales fees 80% cash and 20% on account. The balance in the Accounts Receivable account is the sales on account from last quarter. Budgeted fees earned for this quarter are: $37,100 in July, $39,700 in August and $43,100 in September. Monthly costs include: $1,140 per month for rent, $6,000 a month for salaries plus 6% bonus for fees earned over $35,900 in a month, $430 for depreciation, $170 for Insurance Expense, and 7% of sales fees earned for Miscellaneous Expense, and utilities run $240 per month. Complete the following budgets for the third quarter.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Margaret's Massages is a day spa providing relaxing treatment to its clients.

Margaret's Massages balance sheet for June 30, 2021 is as follows:

Margaret's MassagesBalance SheetJune 30, 2021

Assets
Current Assets:
Cash	$15,270
Accounts Receivable	$1,840
Prepaid Insurance	$770
Total Current Assets		$17,880
Property, Plant & Equipment
Equipment & Fixtures	$18,620
Less: Accumulated Depreciation	($3,470)	$15,150
Total Assets		$33,030

Liabilities
Current Liabilities:
Accounts Payable	$1,900
Total Liabilities		$1,900
Stockholders' Equity
Common Stock, no par	$10,420
Retained Earnings	$20,710
Total Stockholders' Equity		$31,130
Total Liabilities and Stockholders' Equity		$33,030

The following information is also included:

Sales fees 80% cash and 20% on account.
The balance in the Accounts Receivable account is the sales on account from last quarter.
Budgeted fees earned for this quarter are: $37,100 in July, $39,700 in August and $43,100 in September.
Monthly costs include: $1,140 per month for rent, $6,000 a month for salaries plus 6% bonus for fees earned over $35,900 in a month, $430 for depreciation, $170 for Insurance Expense, and 7% of sales fees earned for Miscellaneous Expense, and utilities run $240 per month.

Complete the following budgets for the third quarter.

Cash Sales
Margaret's Massages
Sales Budget
For the Quarter Ended September 30, 2021
July
August September
Sales on Account
Total Sales
Variable Expenses:
Bonus Expense
Margaret's Massages
Selling and Administration Budget
For the Quarter Ended September 30, 2021
July
August
September
Miscellaneous Expense
Total Variable
Expenses
Fixed Expenses:
Salaries Expense
Rent Expense
Total
Depreciation Expense
Utilities Expense
Insurance Expense
Total Fixed Expenses
Total Selling &
Administrative
Expenses
Total

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