I need to create a forecasted income statement and forecasted balance sheet with the following information. Data Section: Actual and Budgeted Unit Sales: April 1,500 May 1,000 June 1,600 July 1,400 August 1,500 September 1,200 Balance Sheet, May 31, 19X5 Cash $8,000 Accounts receivable 107,800 Merchandise inventory 52,800 Fixed assets (net) 130,000 -------- Total assets $298,600 ======== Accounts payable (merchandise) $74,800 Owner's equity 223,800 -------- Total liabilities & equity $298,600 ======== Average selling price $98 Average purchase cost per unit $55 Desired ending inventory (% of next month's unit sales) 60% Collections from customers: Collected in month of sale 20% Collected in month after sale 60% Collected two months after sale 20% Projected cash payments: Variable expenses 30% of sales Fixed expenses (per month) $10,000 Depreciation per month $1,000 - - - - Answer Section: Sales Budget ------------ June July August ------ ------ ------ Units 1,600 1,400 1,500 Dollars $156,800 137,200 147,000 Unit Purchases Budget ------------------ June July August ------ ------ ------ Desired ending inventory 840 900 720 Current month's unit sales 1,600 1,400 1,500 -------- -------- -------- Total units needed 2,440 2,300 2,220 Beginning inventory 960 840 900 -------- -------- -------- Purchases (units) 1,480 1,460 1,320 ======== ======== ======== Purchases (dollars) $81,400 $80,300 $72,600 ======== ======== ======== Cash Budget ----------- June July August ------ ------ ------ Cash balance, beginning $8,000 $8,000 $8,000 Cash receipts: Collections from customers: From April sales 29,400 From May sales 58,800 19,600 From June sales 31,360 94,080 31,360 From July sales 27,440 82,320 From August sales 29,400 -------- -------- -------- Total cash available $127,560 $149,120 $151,080 Cash disbursements: Merchandise $74,800 $81,400 $80,300 Variable expenses 47,040 41,160 44,100 Fixed expenses 10,000 10,000 10,000 Interest paid 0 184 59 -------- -------- -------- Total disbursements $131,840 $132,744 $134,459 -------- -------- -------- Cash balance before financing ($4,280) $16,376 $16,621 Less: Desired ending balance 8,000 8,000 8,000 -------- -------- -------- Excess (deficit) of cash over needs ($12,280) $8,376 $8,621 -------- -------- -------- Financing Borrowing $12,280 $0 $0 Repayment 0 (8,376) (3,904) -------- -------- -------- Total effects of financing $12,280 ($8,376) ($3,904) -------- -------- -------- Cash balance, ending $8,000 $8,000 $12,717 ======== ======== ======== Forecasted Income Statement For Quarter Ended August 31, 19X5 --------------------------------- Sales Cost of goods sold -------- Gross profit -------- Expenses: Variable expenses Fixed expenses Depreciation expense Interest expense -------- Total expenses $0 -------- Net income $0 ======== Forecasted Balance Sheet August 31, 19X5 ------------------------ Assets: Cash Accounts receivable Merchandise inventory Fixed assets (net) -------- Total assets $0 ======== Liabilities & equity: Accounts payable Loans payable 0 Owner's equity -------- Total liabilities & equity $0 ========

I need to create a forecasted income statement and forecasted balance sheet with the following information. Data Section: Actual and Budgeted Unit Sales: April 1,500 May 1,000 June 1,600 July 1,400 August 1,500 September 1,200 Balance Sheet, May 31, 19X5 Cash $8,000 Accounts receivable 107,800 Merchandise inventory 52,800 Fixed assets (net) 130,000 -------- Total assets $298,600 ======== Accounts payable (merchandise) $74,800 Owner's equity 223,800 -------- Total liabilities & equity $298,600 ======== Average selling price $98 Average purchase cost per unit $55 Desired ending inventory (% of next month's unit sales) 60% Collections from customers: Collected in month of sale 20% Collected in month after sale 60% Collected two months after sale 20% Projected cash payments: Variable expenses 30% of sales Fixed expenses (per month) $10,000 Depreciation per month $1,000 - - - - Answer Section: Sales Budget ------------ June July August ------ ------ ------ Units 1,600 1,400 1,500 Dollars $156,800 137,200 147,000 Unit Purchases Budget ------------------ June July August ------ ------ ------ Desired ending inventory 840 900 720 Current month's unit sales 1,600 1,400 1,500 -------- -------- -------- Total units needed 2,440 2,300 2,220 Beginning inventory 960 840 900 -------- -------- -------- Purchases (units) 1,480 1,460 1,320 ======== ======== ======== Purchases (dollars) $81,400 $80,300 $72,600 ======== ======== ======== Cash Budget ----------- June July August ------ ------ ------ Cash balance, beginning $8,000 $8,000 $8,000 Cash receipts: Collections from customers: From April sales 29,400 From May sales 58,800 19,600 From June sales 31,360 94,080 31,360 From July sales 27,440 82,320 From August sales 29,400 -------- -------- -------- Total cash available $127,560 $149,120 $151,080 Cash disbursements: Merchandise $74,800 $81,400 $80,300 Variable expenses 47,040 41,160 44,100 Fixed expenses 10,000 10,000 10,000 Interest paid 0 184 59 -------- -------- -------- Total disbursements $131,840 $132,744 $134,459 -------- -------- -------- Cash balance before financing ($4,280) $16,376 $16,621 Less: Desired ending balance 8,000 8,000 8,000 -------- -------- -------- Excess (deficit) of cash over needs ($12,280) $8,376 $8,621 -------- -------- -------- Financing Borrowing $12,280 $0 $0 Repayment 0 (8,376) (3,904) -------- -------- -------- Total effects of financing $12,280 ($8,376) ($3,904) -------- -------- -------- Cash balance, ending $8,000 $8,000 $12,717 ======== ======== ======== Forecasted Income Statement For Quarter Ended August 31, 19X5 --------------------------------- Sales Cost of goods sold -------- Gross profit -------- Expenses: Variable expenses Fixed expenses Depreciation expense Interest expense -------- Total expenses $0 -------- Net income $0 ======== Forecasted Balance Sheet August 31, 19X5 ------------------------ Assets: Cash Accounts receivable Merchandise inventory Fixed assets (net) -------- Total assets $0 ======== Liabilities & equity: Accounts payable Loans payable 0 Owner's equity -------- Total liabilities & equity $0 ========

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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Question

I need to create a forecasted income statement and forecasted balance sheet with the following information.

Data Section:

Actual and Budgeted Unit Sales:
April	1,500
May	1,000
June	1,600
July	1,400
August	1,500
September	1,200

Balance Sheet, May 31, 19X5
Cash	$8,000
Accounts receivable	107,800
Merchandise inventory	52,800
Fixed assets (net)	130,000
	--------
Total assets	$298,600
	========
Accounts payable (merchandise)	$74,800
Owner's equity	223,800
	--------
Total liabilities & equity	$298,600
	========

Average selling price	$98
Average purchase cost per unit	$55
Desired ending inventory
(% of next month's unit sales)	60%
Collections from customers:
Collected in month of sale	20%
Collected in month after sale	60%
Collected two months after sale	20%
Projected cash payments:
Variable expenses	30%	of sales
Fixed expenses (per month)	$10,000
Depreciation per month	$1,000

-	-	-	-
Answer Section:
Sales Budget
------------
	June	July	August
	------	------	------
Units	1,600	1,400	1,500
Dollars	$156,800	137,200	147,000

Unit Purchases Budget
------------------
	June	July	August
	------	------	------
Desired ending inventory	840	900	720
Current month's unit sales	1,600	1,400	1,500
	--------	--------	--------
Total units needed	2,440	2,300	2,220
Beginning inventory	960	840	900
	--------	--------	--------
Purchases (units)	1,480	1,460	1,320
	========	========	========
Purchases (dollars)	$81,400	$80,300	$72,600
	========	========	========

Cash Budget
-----------
	June	July	August
	------	------	------
Cash balance, beginning	$8,000	$8,000	$8,000
Cash receipts:
Collections from customers:
From April sales	29,400
From May sales	58,800	19,600
From June sales	31,360	94,080	31,360
From July sales		27,440	82,320
From August sales			29,400
	--------	--------	--------
Total cash available	$127,560	$149,120	$151,080
Cash disbursements:
Merchandise	$74,800	$81,400	$80,300
Variable expenses	47,040	41,160	44,100
Fixed expenses	10,000	10,000	10,000
Interest paid	0	184	59
	--------	--------	--------
Total disbursements	$131,840	$132,744	$134,459
	--------	--------	--------
Cash balance before financing	($4,280)	$16,376	$16,621
Less: Desired ending balance	8,000	8,000	8,000
	--------	--------	--------
Excess (deficit) of cash over needs	($12,280)	$8,376	$8,621
	--------	--------	--------
Financing
Borrowing	$12,280	$0	$0
Repayment	0	(8,376)	(3,904)
	--------	--------	--------
Total effects of financing	$12,280	($8,376)	($3,904)
	--------	--------	--------
Cash balance, ending	$8,000	$8,000	$12,717
	========	========	========

Forecasted Income Statement
For Quarter Ended August 31, 19X5
---------------------------------
Sales
Cost of goods sold
			--------
Gross profit
			--------
Expenses:
Variable expenses
Fixed expenses
Depreciation expense
Interest expense
			--------
Total expenses			$0
			--------
Net income			$0
			========

Forecasted Balance Sheet
August 31, 19X5
------------------------
Assets:
Cash
Accounts receivable
Merchandise inventory
Fixed assets (net)
			--------
Total assets			$0
			========
Liabilities & equity:
Accounts payable
Loans payable			0
Owner's equity
			--------
Total liabilities & equity			$0
			========
-	-	-	-

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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