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 $13,860 Accounts Receivable $2,470 Prepaid Insurance $770 Total Current Assets $17,100 Property, Plant & Equipment Equipment & Fixtures $19,780 Less: Accumulated Depreciation ($3,470) $16,310 Total Assets $33,410 Liabilities Current Liabilities: Accounts Payable $2,530 Total Liabilities $2,530 Stockholders' Equity Common Stock, no par $9,010 Retained Earnings $21,870 Total Stockholders' Equity $30,880 Total Liabilities and Stockholders' Equity $33,410 The following information is also included: Sales fees 70% cash and 30% on account. The balance in the Accounts Receivable account is the sales on account from last quarter. Budgeted fees earned for this quarter are: $35,400 in July, $40,800 in August and $43,300 in September. Monthly costs include: $1,270 per month for rent, $5,800 a month for salaries plus 5% bonus for fees earned over $36,800 in a month, $420 for depreciation, $250 for Insurance Expense, and 7% of sales fees earned for Miscellaneous Expense, and utilities run $230 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	$13,860
Accounts Receivable	$2,470
Prepaid Insurance	$770
Total Current Assets		$17,100
Property, Plant & Equipment
Equipment & Fixtures	$19,780
Less: Accumulated Depreciation	($3,470)	$16,310
Total Assets		$33,410

Liabilities
Current Liabilities:
Accounts Payable	$2,530
Total Liabilities		$2,530
Stockholders' Equity
Common Stock, no par	$9,010
Retained Earnings	$21,870
Total Stockholders' Equity		$30,880
Total Liabilities and Stockholders' Equity		$33,410

The following information is also included:

Sales fees 70% cash and 30% on account.
The balance in the Accounts Receivable account is the sales on account from last quarter.
Budgeted fees earned for this quarter are: $35,400 in July, $40,800 in August and $43,300 in September.
Monthly costs include: $1,270 per month for rent, $5,800 a month for salaries plus 5% bonus for fees earned over $36,800 in a month, $420 for depreciation, $250 for Insurance Expense, and 7% of sales fees earned for Miscellaneous Expense, and utilities run $230 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
Miscellaneous Expense
Total Variable Expenses
Fixed Expenses:
Salaries Expense
Rent Expense
Total
Margaret's Massages
Selling and Administration Budget
For the Quarter Ended September 30, 2021
July
August
Depreciation Expense
Utilities Expense
Insurance Expense
Total Fixed Expenses
Total Selling & Administrative Expenses
September
Total

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