15esFortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit.Sales (in units) are budgeted at 158,000 for the first quarter. Cost of goods sold is $12 per unit. Other expense information for the firstquarter follows.Sales CommissionsRentAdvertisingOffice salariesDepreciationInterestTax rate10% of sales dollarsper quarterper quarterper quarterper quarter$ 49,000$ 583,000$ 282,000$ 109,0001.25% quarterly on $230,000 note payable30%Prepare a budgeted income statement for the first quarter ended March 31. (Round your intermediate and final answers to thenearest whole dollar.)FORTUNE, INCORPORATEDBudgeted Income StatementFor Quarter Ended March 31SalesCost of goods soldGross profitSelling, general and administrative expensesCommon stockRent expenseAdvertising expenseOffice salaries expenseDepreciation expenseInterest expense0

Working Note#1Computation of sales revenue:Sales revenue=Budgeted units per quarter x Price per…

Answered: Fortune Incorporated is preparing its…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

M/s. MNO produces cookies. The company is currently in the process of establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly unit sales were; 40000 in quarter one, and 45000, 50000, 55000 in the subsequent quarters. Unit sales are expected to increase 25% in quarter one, and 5%, 10%, 5% in the subsequent quarters and each unit is expected to sell for Rs. 6.Required:Prepare Sales Budget
The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: Line Item Description Sales September October November $103,000 $122,000 $166,000 Manufacturing costs 43,000 52,000 60,000 Selling and administrative expenses Capital expenditures 36,000 37,000 63,000 40,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $10,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of…
Markham Company has completed its sales budget for the first quarter of Year 2. Projected credit sales for the first four months of the year are shown below: January February March April $ 20,000 $ 26,000 $ 35,000 $ 38,000 The company's past records show collection of credit sales as follows: 40% in the month of sale and the balance in the following month. The total cash collection from receivables in March is expected to be: Multiple Choice $29,600. $22,100. $31,850. $35,000.
Leaning Tower of Pizza, Inc. is preparing its master budget for its first quarter of business. It expects to sell 8,000 pizzas at $7 per pizza per month. It expects to collect 90% of the sales in the month of the sale and 10% in the following month. Calculate its accounts receivable balance at the end of its first quarter.
Sally Automotive is preparing the budget for the first quarter and estimates that budgeted cash purchases will be $106,000, $98,400, and $103,600 for January, February, and March, respectively. The company also purchases on credit and historically pays 40% of its credit purchases in the month of purchase, 50% in the month following purchase, and 10% in the second month after the purchase. Credit purchases during this time are expected to be $186,000, $174,800, and $202,000 for January, February, and March, respectively. What amount will be reported for Accounts Payable in the March balance sheet? $290,400 ○ $204,280 $123,480 ○ $138,680
Farm Supply Company's budgeted monthly sales are as follows: April $780,000, May $560,000, and June $900,000. Sales are 60% cash and 40% on account. Farm Supply collects all its accounts receivable in the month following the sale. Cost of goods sold is budgeted at 75% of sales and ending inventory is budgeted at 20% of the next month's cost of goods sold. All inventory purchases are paid 28% in the month of purchase and 72% in the following month. What are Farm Supply's budgeted cash collections for the month of May? O $336,000 O $414,000 O $648,000 O $747,000 O None of the above
Komodo Supply Company's monthly sales budget is as follows: April $160,000, May $130,000, and June $120,000. The company's policy is to set selling prices to earn a 30% gross profit on sales revenue and to maintain an ending inventory balance equal to 40% of the next month's cost of goods sold. What is the dollar amount of inventory purchases that is budgeted for the month of May? O $87,800 $88.200 O $89.600 $93,800 O None of the above
Capstone Inc. collects 20% of its sales on account in the month of the sale and 80% in the month following the sale. If sales on account are budgeted to be $117,000 for September and $135,000 for October, what are the budgeted cash receipts from sales on account for October? $_________
The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November $89,000 $109,000 $146,000 37,000 47,000 31,000 33,000 Sales Manufacturing costs Selling and administrative expenses Capital expenditures The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of $34,000, marketable…
Fortune Incorporated is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are budgeted at 150,000 for the first quarter. Cost of goods sold is $14 per unit. Other expense information for the first quarter follows. Sales Commissions Rent Advertising Office salaries Depreciation Interest Tax rate 8% of sales dollars $ 42,000 per quarter $ 562,500 per quarter $225,000 per quarter $ 120,000 1.25% quarterly on $250,000 note payable 30% per quarter Prepare a budgeted income statement for the first quarter ended March 31. Note: Round your intermediate and final answers to the nearest whole dollar. FORTUNE, INCORPORATED Budgeted Income Statement For Quarter Ended March 31 Sales Cost of goods sold Gross profit Selling, general and administrative expenses Sales commissions expense Rent expense Advertising expense Office salaries expense Depreciation expense Interest expense

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS