Becah's Boutique is a retail store carrying a wide selection of designer clothing. Becah's Boutique balance sheet for March 31, 2021, is as follows: Becah's BoutiqueBalance SheetMarch 31, 2021 Assets Current Assets: Cash $17,000 Accounts Receivable $15,900 Merchandise Inventory $48,200 Prepaid Insurance $1,620 Total Current Assets $82,720 Property, Plant & Equipment Equipment & Fixtures $32,200 Less: Accumulated Depreciation ($13,000) $19,200 Total Assets $101,920 Liabilities Current Liabilities: $17,400 Accounts Payable $4,070 Salaries & Commissions Payable $21,470 Total Liabilities Stockholders' Equity Common Stock, no par $19,900 Retained Earnings $60,550 Total Stockholders' Equity $80,450 Total Liabilities and Stockholders' Equity $101,920 The following information is also included: Sales are 70% cash and 30% on account. The balance in the Accounts Receivable account is the sales on account from last quarter. Budgeted sales for this quarter are: $52,000 in April, $78,000 in May and $61,000 in June. August sales are projected to be $71,000. Beginning Merchandise inventory is on the Balance Sheet. Budgeted Cost of Goods Sold averages 60% of sales. Budgeted Ending Merchandise Inventory is equal to $22,000 plus 80% of the next months Cost of Goods Sold. The monthly payroll for salaries is $2,500 plus commissions equal to 10% of sales. Other monthly costs include: $1,800 per month for rent, $520 for depreciation, $220 for Insurance Expense (from expiration of Prepaid Insurance), and 5% of sales for Miscellaneous Expense. Complete the following budgets for the second 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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Becah's Boutique is a retail store carrying a wide selection of designer clothing.

Becah's Boutique balance sheet for March 31, 2021, is as follows:

Becah's BoutiqueBalance SheetMarch 31, 2021

Assets
Current Assets:
Cash	$17,000
Accounts Receivable	$15,900
Merchandise Inventory	$48,200
Prepaid Insurance	$1,620
Total Current Assets		$82,720
Property, Plant & Equipment
Equipment & Fixtures	$32,200
Less: Accumulated Depreciation	($13,000)	$19,200
Total Assets		$101,920

Liabilities
Current Liabilities:	$17,400
Accounts Payable	$4,070
Salaries & Commissions Payable		$21,470
Total Liabilities
Stockholders' Equity
Common Stock, no par	$19,900
Retained Earnings	$60,550
Total Stockholders' Equity		$80,450
Total Liabilities and Stockholders' Equity		$101,920

The following information is also included:

Sales are 70% cash and 30% on account.
The balance in the Accounts Receivable account is the sales on account from last quarter.
Budgeted sales for this quarter are: $52,000 in April, $78,000 in May and $61,000 in June. August sales are projected to be $71,000.
Beginning Merchandise inventory is on the Balance Sheet. Budgeted Cost of Goods Sold averages 60% of sales.
Budgeted Ending Merchandise Inventory is equal to $22,000 plus 80% of the next months Cost of Goods Sold.
The monthly payroll for salaries is $2,500 plus commissions equal to 10% of sales.
Other monthly costs include: $1,800 per month for rent, $520 for depreciation, $220 for Insurance Expense (from expiration of Prepaid Insurance), and 5% of sales for Miscellaneous Expense.

Complete the following budgets for the second quarter.

Cash Sales
Sales on Account
Total Sales
Becah's Boutique
Sales Budget
For the Quarter Ended June 30, 2021
April
May
June
Becah's Boutique
Inventory, Purchases, & Cost of Goods Sold Budget
For the Quarter Ended June 30, 2021
April
May
Cost of Goods Sold
Plus: Desired Ending Merchandise Inventory
Total Merchandise Required
Less: Beginning Merchandise Inventory
Budgeted Purchases
Total
Becah's Boutique
Selling and Administration Budget
For the Quarter Ended June 30, 2021
April
May
Variable Expenses:
Commissions Expense
Miscellaneous Expense
Total Variable Expenses
Fixed Expenses:
Salaries Expense
Rent Expense
Depreciation Expense
Insurance Expense
Total Fixed Expenses
Total Selling & Administrative Expenses
June
June
Total
Total

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