Problem 2The balance sheet of MikeLab, Inc., a distributor of photographic supplies,as of June 30 is given below:MikeLab, Inc.Balance SheetJune 30AssetsP8,00072,00030,000CashAccounts receivableInventory500,000Buildings and equipment, net of depreciationP610,000Total assetsLiabilities and EquityP90,000Accounts payable, suppliersNote payableShare capital, no parRetained earningsTotal liabilities and equity15,000420,00085,000P610,000MikeLab, Inc. has not budgeted previously, and for this reason it is limitingits master budget planning horizon to just one month ahead - namely, July. Thecompany has assembled the following budgeted data relating to July.a. Sales are budgeted at P250,000. Of these sales, P60,000 will be for cash;the remainder will be credit sales. One-half of a month's credit sales arecollected in the month the sales are made, and the remainder is collectedin the month following. All of the June 30 accounts receivable will becollected in July.b. Purchases of inventory are expected to total P200,000 during July. Thesepurchases will all be on account. Forty percent of all inventory purchasesare paid for in the month of purchase; the remainder is paid in thefollowing month. All of the June 30 accounts payable to suppliers will bepaid during July. c. The July 31 inventory balance is budgeted at P40,000.d. Operating expenses for July are budgeted at P51,000, exclusive ofdepreciation. These expenses will be paid in cash. Depreciation is budgetedat P2,000 for the month.e. The note payable on the June 30 balance sheet will be paid during July.The company's interest expense for July (on all borrowing) will be P500,which will be paid in cash.f. New warehouse equipment costing P9,000 will be purchased for cashduring July.g. During July, the company will borrow P18,000 from its bank by giving anew note payable to the bank for that amount. The new note will be due inone year.Required.1. Prepare a cash budget for July. Support your budget with schedules showingbudgeted cash receipts from sales and budgeted cash payments for inventorypurchases.Please present your solution in good form below.

Name: Problem 2The balance sheet of MikeLab, Inc., a distributor of photogr
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Problem 2The balance sheet of MikeLab, Inc., a distributor of photographic supplies,as of June 30 is given below:MikeLab, Inc.Balance SheetJune 30AssetsP8,00072,00030,000CashAccounts receivableInventory500,000Buildings and equipment, net of deprecia

Cash budget of the business shows all expected cash receipts and cash payments from the business and…

Business

Accounting

C. The July 31 inventory balance is budgeted at P40,000. d. Operating expenses for July are budgeted at P51,000, exclusive oi depreciation. These expenses will be paid in cash. Depreciation is budgeted at P2,000 for the month. e. The note payable on the June 30 balance sheet will be paid during July. The company's interest expense for July (on all borrowing) will be P500, which will be paid in cash. I. New warehouse equipment costing P9,000 will be purchased for cash during July. g. During July, the company will borrow P18,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required. 1. Prepare a cash budget for July. Support your budget with schedules showing budgeted cash receipts from sales and budgeted cash payments for inventory purchases. Please present your solution in good form below.

C. The July 31 inventory balance is budgeted at P40,000. d. Operating expenses for July are budgeted at P51,000, exclusive oi depreciation. These expenses will be paid in cash. Depreciation is budgeted at P2,000 for the month. e. The note payable on the June 30 balance sheet will be paid during July. The company's interest expense for July (on all borrowing) will be P500, which will be paid in cash. I. New warehouse equipment costing P9,000 will be purchased for cash during July. g. During July, the company will borrow P18,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required. 1. Prepare a cash budget for July. Support your budget with schedules showing budgeted cash receipts from sales and budgeted cash payments for inventory purchases. Please present your solution in good form below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

J.Banera Company has budgeted its operations for March. No change in the inventory level during the month is planned. Selected data based on estimated amounts are as follows: $(120,000) 48,000 42,000 72,000 18,000 12,000 Net loss Increase in accounts payable Deprèciation expense Decrease in gross amounts of trade account receivables Purchase of equipment on 90-day credit terms Provision for estimated warranty liability What is the expected change in the cash position during March? Your response must be in the form like this (i.e. 69000 increase).
Bramble Corp. reported the following information for 2022: Budgeted purchases October November December $260000 $296000 $318000 • Operating expenses are: Salaries, $110000; Depreciation, $30000; Rent, $20000; Utilities, $28000 • Operating expenses are paid during the month incurred. • Accounts payable is used only for inventory acquisitions. What are budgeted cash disbursements for operating expenses in November? $158000 $454000 $149000 O $188000
QOPPC company chief accountant has provided you with the following information relating to the next budget period. Expenses: (in GH¢) October November December Selling & distribution 20,000 30,000 34,000 General & administration 15,000 18,000 12,000 Bad debts 21,000 15,000 20,000 Rate 8,000 6,000 10,000 Interest charges 1,600 2,000 2,400 Depreciation expenses 30,000 10,000 10,000 Expenses are payable in the month of incurrence. 2. A contingent liability of GH¢10,000 is expected to mature in November 3. Estimated cash balance at the end of September will be GH¢5000. Cash balances should not be less than GH¢10,000. Cash can be borrowed in multiples of GH¢10,000 to finance any deficit at an interest rate of 15% per annum. 4. The sales manager's salary, which is GH¢ 7000 per month is expected to increase by GH¢1,000 every month after June 5. Motor vehicle will be purchased in November at GH¢240,000.…
The Runner Antique Mall expects to make purchases in the first quarter of 2021 as follows: January $85,500 February 108,000 March 76,500 Purchases in December 2020 are expected to be $82,600. The company expects that 50 percent of a month's purchases will be paid in the month of purchase and 50 percent will be paid in the following month. Estimate cash disbursements related to purchases for each month of the first quarter of 2021.
A. What are the expected revenues for S2BU for each month, April through September? Revenues are recorded in the month of the occasion. B. What are the expected cash receipts for each month, April through July?
Flint, Inc. provided the following information: Projected merchandise purchases . March April $67,000 $75,000 Budgeted cash disbursements $ Flint pays for 40% of merchandise purchases in the month of the purchase and 60% in the following month. General operating expenses are budgeted to be $25,000 per month of which depreciation is $2,000 of this amount. Flint pays operating expenses in the month incurred. Calculate Flint's budgeted cash disbursements for May. May $81,000
The income statement for the first quarter of 2019 was as follows: Income Statement For the Quarter Ended March 31, 2019 Sales Cost of goods sold Gross profit Operating expenses ales salaries Rent expense Depreciation Utilities Miscellaneous Total operating expenses Net income $52,000 24,000 12,000 3,600 12,800 $720,000 396,000 324,000 104,400 $219,600 Prepare a budgeted quarterly income statement in tabular form for the first quarter of 2020.
the second quarter of 2021: Credit sales Credit purchases Cash disbursements Wages, taxes, and expenses Interest Equipment purchases Beginning cash balance Cash receipts Cash collections from credit sales Total cash available Cash disbursements The company predicts that 5 percent of its credit sales will never be collected, 30 percent of its sales will be collected in the month of the sale, and the remaining 65 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. Purchases Wages, taxes, and expenses Interest In March 2021, credit sales were $190,000 and credit purchases were $130,000. Using this information, complete the following cash budget: (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.) Equipment purchases April May June $320,000 $300,000 $360,000 128,000 151,000 176,000 Total cash disbursements 44,000 11,000 80,000 Ending cash balance 11,500 11,000 150,000 $…
The following information pertains to Omega Projects Ltd for the three months ended 31 December 2020. Actual Budgeted October November December R R R Revenue (20% for cash and 80% on credit) 360 000 380 000 400 000 Purchases (10% for cash 90% on credit) 240 000 280 000 320 000 Salaries and wages paid 40 000 60 000 60 000 Cash expenses 24 000 28 000 32 000 Depreciation 2 000 2 000 2 000 Additional information: It is expected that debtors will settle their accounts as follows: 20% in the month of invoice 70% in the month after the month of invoice, and 5% in the second month after the month of The remaining 5% is usually written off as bad Trade creditors are paid in the month after the purchases at a discount of 5%. 50% of the salaries and wages are weekly wages. Because wages are paid weekly, usually 10% of the wages are paid in the month following the month in which they were…
The beginning cash balance is $18,000. Sales are forecasted at $860,000 of which 80% will be on account. Seventy percent of credit sales are expected to be collected in the year of sale. Cash expenditures for the year are forecasted at $475,000. Accounts Receivable from previous accounting periods totaling $11,300 will be collected in the current year. The company is required to make a $14,000 loan payment and an annual interest payment on the last day of every year. The loan balance as of the beginning of the year is $95,000, and the annual interest rate is 8%. Compute the excess of available cash over cash disbursements. Excess of available cash over cash disbursements $